CVD Equipment Corporation (NASDAQ:CVV) Q4 2021 Results Conference Call March 31, 2022 5:30 PM ET Company Participants Emmanuel Lakios - CEO Thomas McNeill - CFO Conference Call Participants Brett Reiss - Janney Montgomery Scott Operator Greetings, and welcome to the CVD Equipment 2021 Fourth Quarter and Year-End Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. We will begin with some prepared remarks followed by a question-and-answer session. Presenting on ...

Part I [Item 1. Business Description](index=3&type=section&id=Item%201.%20Description%20of%20Business%2E) CVD Equipment Corporation designs and manufactures chemical vapor deposition and thermal process equipment for advanced materials, experiencing significant order growth and improved liquidity in 2021 [Business Overview](index=3&type=section&id=Business%20Overview) CVD Equipment Corporation develops and manufactures chemical vapor deposition and process equipment for advanced materials, serving diverse markets with custom and standardized systems - The company develops, designs, manufactures, and services a broad range of chemical vapor deposition, gas control, and other process equipment for advanced materials and coatings[10](index=10&type=chunk) - Key target markets include advanced nanomaterials, batteries, Silicon Carbide for high power electronics, aerospace components, medical devices, semiconductors, and solar cells[10](index=10&type=chunk) - CVD is developing a line of proprietary standard use products (EasyTube® and CVD product lines) to complement its legacy custom systems, aiming to reduce cost and delivery times[12](index=12&type=chunk) [2021 Developments](index=5&type=section&id=2021%20Developments) In 2021, new leadership focused on core equipment, achieving significant order growth, restructuring Tantaline for profitability, and improving liquidity through asset sales and PPP loan forgiveness - In January 2021, Emmanuel Lakios was appointed President and CEO to set a new course toward growth and profitability, focusing on the core equipment business[17](index=17&type=chunk) 2021 Business Performance Highlights | Metric | Value/Change | Note | | :--- | :--- | :--- | | New Order Bookings | > $21 million | ~75% increase vs 2020 | | CVD Equipment Orders | 100% growth | 23 system orders in 2021 | | Quarterly Revenue Trend | Sequential growth | Q1: $3.4M, Q2: $4.0M, Q3: $4.3M, Q4: $4.7M | - The company sold its 555 Building for **$24.36 million**, resulting in a gain of **$6.9 million** and net proceeds of approximately **$14 million**[25](index=25&type=chunk) - A Paycheck Protection Program (PPP) loan was forgiven, resulting in a gain on debt extinguishment of **$2,443,418**[27](index=27&type=chunk) [Segments](index=7&type=section&id=Segments) The company operates through three segments: CVD/First Nano for deposition systems, SDC for gas and chemical delivery, and CVD Materials for coatings and advanced materials - **CVD/First Nano:** Supplies CVD systems for research, development, and manufacturing in aerospace, medical, semiconductor, and battery sectors[29](index=29&type=chunk) - **SDC:** Designs and manufactures ultra-high purity gas and chemical delivery control systems, sold standalone or with CVD systems[30](index=30&type=chunk) - **CVD Materials:** Comprises Tantaline® corrosion-resistant coatings, MesoScribe™ printing services, and carbon composite products[31](index=31&type=chunk) [Principal Products](index=8&type=section&id=Principal%20Products) CVD's principal products include Chemical Vapor Deposition, Rapid Thermal Processing, and Annealing/Diffusion systems, alongside ultra-high purity gas control and various advanced material products - Equipment products include Chemical Vapor Deposition (CVD) systems, Rapid Thermal Processing (RTP) systems, and Annealing/Diffusion Furnaces, with prices ranging from **$200,000** to over **$2,500,000** for large systems[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - Materials products consist of Quartz-ware consumables, MesoPlasma™ direct write printing for sensors and heaters, and Tantaline® corrosion-resistant coating services[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [Markets, Customers, and Competition](index=9&type=section&id=Markets%2C%20Customers%2C%20and%20Competition) CVD serves global markets, diversified its customer base in 2021 with no single customer exceeding 10% of revenue, and faces intense competition from both larger and smaller firms - In 2021, no customer exceeded **10%** of revenues, compared to 2020 where two customers represented **30.5%** of annual revenues[47](index=47&type=chunk) International Revenue | Year | International Revenue | % of Total Revenue | | :--- | :--- | :--- | | 2021 | $4.3 million | 26.0% | | 2020 | $2.8 million | 16.8% | - The company faces intense competition from both large, established companies with greater financial resources and smaller, lower-cost competitors[50](index=50&type=chunk)[52](index=52&type=chunk) [Backlog and R&D](index=11&type=section&id=Backlog%20and%20R%26D) The company's order backlog significantly increased to $10.4 million in 2021, accompanied by a rise in research and development expenses Order Backlog Comparison | Date | Backlog Amount | | :--- | :--- | | Dec 31, 2021 | $10.4 million | | Dec 31, 2020 | $5.7 million | Research and Development Expenses | Year | R&D Expense | | :--- | :--- | | 2021 | $481,000 | | 2020 | $373,000 | [Human Capital](index=13&type=section&id=Human%20Capital) As of December 31, 2021, CVD had 113 employees, a decrease from 2020, with management focusing on culture, performance-based compensation, and employee safety Employee Headcount | Date | Total Employees | | :--- | :--- | | Dec 31, 2021 | 113 | | Dec 31, 2020 | 130 | - A key strategic focus is to foster a strong culture, align compensation with performance, and establish succession planning[69](index=69&type=chunk)[71](index=71&type=chunk) - The company implemented various safety protocols in response to COVID-19, including work-from-home flexibility, increased cleaning, and physical distancing procedures[72](index=72&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including supply chain disruptions, inflation, customer concentration, dependence on key personnel, intense competition, and historical operating losses - The company is experiencing supply chain delays and cost increases for components, which may impact revenue recognition, reduce gross margins, and extend manufacturing lead times[75](index=75&type=chunk) - The COVID-19 pandemic has adversely affected business operations, supply chains, and customer demand, particularly in the aerospace sector, which is a significant part of the business[76](index=76&type=chunk) - Recent inflation has adversely affected costs for materials, production, and labor[79](index=79&type=chunk) - Historically, a concentrated customer base poses a risk; while no customer accounted for over **10%** of revenue in 2021, the loss of a major customer could have a material adverse effect[86](index=86&type=chunk)[87](index=87&type=chunk) - The company's success is highly dependent on key personnel, including the CEO and President, and the current labor market is very competitive[95](index=95&type=chunk)[96](index=96&type=chunk) - The company has reported operating losses in 2019, 2020, and 2021, and volatile demand makes it difficult to budget expense levels accurately[108](index=108&type=chunk) [Item 1B. Unresolved Staff Comments](index=28&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[152](index=152&type=chunk) [Item 2. Property Description](index=29&type=section&id=Item%202.%20Description%20of%20Property%2E) The company owns two manufacturing facilities in New York and leases a facility in Denmark for its CVD Materials segment Company Properties | Location | Size (sf) | Segment | Ownership | Principal Use | | :--- | :--- | :--- | :--- | :--- | | Central Islip, NY | 130,000 | CVD Equipment | Owned | Corporate, R&D, Manufacturing | | Saugerties, NY | 22,000 | SDC | Owned | Manufacturing | | Nordborgvej, Denmark | 7,793 | CVD Materials | Leased | Process Coatings, Administration | [Item 3. Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings%2E) The company reports no legal proceedings - Not applicable[157](index=157&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures%2E) The company reports no mine safety disclosures - Not applicable[159](index=159&type=chunk) Part II [Item 5. Market for Common Equity and Related Matters](index=30&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under CVV, has never paid dividends, and had 618,500 securities issuable from options as of December 31, 2021 2021 Quarterly Stock Price Range (CVV) | Quarter | High | Low | | :--- | :--- | :--- | | 1st Quarter | $6.86 | $3.83 | | 2nd Quarter | $5.11 | $3.85 | | 3rd Quarter | $5.27 | $3.96 | | 4th Quarter | $5.85 | $4.09 | - The company has never paid dividends on its common stock and does not anticipate paying them at the present time, intending to retain earnings for business use[163](index=163&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2021) | Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 618,500 | $7.32 | 138,198 | [Item 7. Management's Discussion and Analysis (MD&A)](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) In 2021, revenue slightly decreased, but the company achieved a net income of $4.7 million due to significant gains from asset sales and PPP loan forgiveness, substantially improving working capital [Results of Operations](index=36&type=section&id=Results%20of%20Operations) In 2021, revenue slightly decreased to $16.4 million, gross profit margin declined, but the company reported a net income of $4.7 million due to significant non-operating gains Consolidated Statements of Operations (2021 vs 2020) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | $16,446,813 | $16,920,219 | | Gross Profit | $2,538,839 | $2,882,406 | | Operating Loss | ($4,807,253) | ($7,823,957) | | Net Income (Loss) | $4,746,485 | ($6,074,952) | | Diluted EPS | $0.71 | ($0.91) | Revenue by Segment (2021 vs 2020) | Segment | 2021 Revenue | 2020 Revenue | % Change | | :--- | :--- | :--- | :--- | | CVD Equipment | $8,588,541 | $10,385,107 | (17.3%) | | SDC | $4,524,767 | $4,207,182 | 7.5% | | CVD Materials | $3,333,505 | $2,327,930 | 43.2% | | **Total** | **$16,446,813** | **$16,920,219** | **(2.8%)** | - The decrease in operating loss was primarily due to the absence of a **$3.6 million** impairment charge that was recorded in 2020[202](index=202&type=chunk)[205](index=205&type=chunk) - Other income of **$9.6 million** in 2021 was driven by a **$6.9 million** gain on the sale of the 555 building and a **$2.4 million** gain on PPP loan extinguishment[206](index=206&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2021, working capital and cash significantly increased to $16.7 million, primarily due to asset sales, with management confident in sufficient liquidity for the next 12-18 months Working Capital and Cash Position | Metric | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Working Capital | $16.7 million | $8.1 million | | Cash and Cash Equivalents | $16.7 million | $7.7 million | - Net cash used in operating activities was **$4.3 million** in 2021[213](index=213&type=chunk) - The sale of the 555 Building in July 2021 generated approximately **$14 million** in net proceeds, significantly improving liquidity[214](index=214&type=chunk) - Management believes cash and projected cash flow are sufficient to meet needs for the next 12-18 months from the filing date[223](index=223&type=chunk) [Critical Accounting Policies](index=42&type=section&id=Critical%20Accounting%20Policies) The company's critical accounting policies involve significant management estimates, particularly for revenue recognition on long-term contracts, inventory valuation, and long-lived asset impairment - **Revenue Recognition:** For custom equipment sales, revenue is recognized over time using an input method based on the ratio of costs incurred to total estimated costs, which requires significant estimates of costs to complete projects[226](index=226&type=chunk)[227](index=227&type=chunk) - **Use of Estimates:** The preparation of financial statements requires management to make significant estimates, including revenue on long-term contracts, inventory valuation, allowance for doubtful accounts, and the valuation of stock-based compensation and long-lived assets[224](index=224&type=chunk) - **Long-Lived Assets:** Assets are reviewed for impairment whenever events indicate their carrying value may not be recoverable, with an impairment loss measured as the excess of carrying value over fair value[231](index=231&type=chunk) [Item 9A. Controls and Procedures](index=44&type=section&id=Item%209A.%20Controls%20and%20Procedures%2E) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective[238](index=238&type=chunk) - Management concluded that as of December 31, 2021, the company's internal control over financial reporting was effective based on the COSO Internal Control – Integrated Framework (2013)[242](index=242&type=chunk) - The annual report does not include an attestation report from the registered public accounting firm regarding internal control over financial reporting, as permitted by SEC rules for the company[243](index=243&type=chunk) Part III [Item 10. Directors, Executive Officers, and Corporate Governance](index=46&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance%2E) The Board of Directors comprises five members, with separate Chairman and CEO roles, and an independent Audit Committee, operating under a Corporate Code of Conduct and Ethics - The Board consists of five members: Emmanuel Lakios (CEO), Lawrence J. Waldman (Chairman), Conrad J. Gunther, Raymond A. Nielsen, and Robert M. Brill[259](index=259&type=chunk) - The positions of Chairman (Lawrence J. Waldman) and CEO (Emmanuel Lakios) are separate, with Mr Waldman also serving as the Lead Independent Director[253](index=253&type=chunk) - The Audit Committee consists of four independent directors: Lawrence J. Waldman (Chairman), Conrad J. Gunther, Raymond A. Nielsen, and Robert M. Brill, with Mr Waldman designated as the audit committee financial expert[271](index=271&type=chunk)[273](index=273&type=chunk) [Item 11. Executive Compensation](index=52&type=section&id=Item%2011.%20Executive%20Compensation%2E) In 2021, CEO Emmanuel Lakios's total compensation was $666,095, with new employment agreements for key executives and a revised compensation plan for non-employee directors 2021 Summary Compensation Table | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Emmanuel Lakios, President & CEO | 2021 | 294,190 | 101,000 | 258,400 | 666,095 | | Thomas McNeill, EVP & CFO | 2021 | 237,306 | 74,000 | 129,200 | 444,698 | | Jeffrey A. Brogan, VP Sales & Marketing | 2021 | 183,179 | 21,000 | 48,660 | 252,839 | - In June 2021, the company entered into employment agreements with CEO Emmanuel Lakios (initial base salary **$288,000**) and CFO Thomas McNeill (initial base salary **$238,000**)[279](index=279&type=chunk)[285](index=285&type=chunk) - A new director compensation plan effective October 2021 provides each non-employee director with a **$40,000** annual cash retainer and a **$40,000** annual equity retainer, plus additional compensation for committee and board leadership roles[299](index=299&type=chunk) [Item 12. Security Ownership](index=57&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters%2E) As of March 15, 2022, Leviticus Partners, L.P. and former CEO Leonard A. Rosenbaum are the only beneficial owners of more than 5% of common stock Security Ownership of Certain Beneficial Owners (as of March 15, 2022) | Name of Beneficial Owner | Amount of Beneficial Ownership | Percent of Class (%) | | :--- | :--- | :--- | | Leviticus Partners, L.P. | 660,000 | 9.8 | | Leonard A. Rosenbaum | 353,862 | 5.3 | | All directors and executive officers as a group (nine persons) | 452,725 | 6.7 | [Item 13. Related Transactions and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence%2E) The company reports no related party transactions, and four of its five directors are deemed independent under Nasdaq rules - There were no transactions with related persons to report[310](index=310&type=chunk) - Four of the five directors have been determined to be independent: Lawrence J. Waldman, Conrad J. Gunther, Raymond A. Nielsen, and Robert M. Brill[311](index=311&type=chunk) [Item 14. Principal Accountant Fees and Services](index=59&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services%2E) Marcum, LLP served as the independent auditor, with total fees of $164,000 in 2021, primarily for audit and audit-related services, all pre-approved by the Audit Committee Accountant Fees (Marcum, LLP) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $149,000 | $147,500 | | Audit-Related Fees | $15,000 | $10,000 | | All Other Fees | - | - | | **Total Fees** | **$164,000** | **$157,500** | Part IV [Item 15. Exhibits and Financial Statement Schedules](index=60&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and required certifications - Lists exhibits including corporate governance documents, material contracts (e.g., employment agreements for CEO and CFO), and required certifications[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=65&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Marcum LLP issued an unqualified opinion on the financial statements, identifying revenue recognition for system projects as a critical audit matter due to complex cost estimation - Marcum LLP issued an opinion that the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020[327](index=327&type=chunk) - A Critical Audit Matter was identified related to "Revenue Recognition – Estimated Total Contract Costs" due to the subjective judgment required by management in estimating costs to complete on long-term system projects[333](index=333&type=chunk)[334](index=334&type=chunk) [Consolidated Financial Statements](index=67&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements include Balance Sheets, Statements of Operations, Changes in Stockholders' Equity, and Cash Flows, showing a decrease in total assets and liabilities, and an increase in equity Key Balance Sheet Figures (2021 vs 2020) | Metric | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Current Assets | $23,070,500 | $11,789,957 | | Total Assets | $35,524,229 | $40,935,925 | | Total Current Liabilities | $6,336,254 | $3,704,296 | | Total Liabilities | $6,336,254 | $16,810,353 | | Total Stockholders' Equity | $29,187,975 | $24,125,572 | [Notes to Consolidated Financial Statements](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, revenue disaggregation, significant debt reduction, income taxes, stockholders' equity, and the gain from the 555 Building sale - Note 3 (Revenue): Disaggregates revenue by market (Aerospace, Industrial, Research) and timing (over time vs point in time), with Industrial revenue being the largest contributor in 2021 at **$10.0 million**[397](index=397&type=chunk) - Note 7 (Long-term Debt): Total long-term debt decreased from **$13.8 million** in 2020 to **$1.8 million** in 2021, primarily due to the satisfaction of a **$9.3 million** mortgage and the forgiveness of a **$2.4 million** PPP loan[416](index=416&type=chunk) - Note 9 (Income Taxes): The company maintains a full valuation allowance against its net deferred tax assets due to recent operating losses, recognizing a tax benefit of **$1.5 million** in 2020 due to the CARES Act allowing for NOL carrybacks[425](index=425&type=chunk)[426](index=426&type=chunk) - Note 14 (Sale of 555 Building): The sale of the 555 Building on July 26, 2021, for **$24.36 million** resulted in a recognized gain of **$6,894,109** and net proceeds of approximately **$14 million**[469](index=469&type=chunk)

CVD Equipment Corporation (NASDAQ:CVV) Q3 2021 Earnings Conference Call November 15, 2021 5:30 PM ET Company Participants Emmanuel Lakios - CEO Thomas McNeill - CFO Conference Call Participants Brett Reiss - Janney 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. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ____ to _____ Commission file number: 1-16525 CVD EQUIPMENT CORPORATION (Name of Registrant in Its Charter) New York 11-2621692 State or Other Jurisdiction ...

Financial Performance - Total revenue for the three months ended June 30, 2021, was $4,034,408, an increase of 8.5% compared to $3,718,884 for the same period in 2020[14] - Gross profit for the six months ended June 30, 2021, was $1,164,242, compared to $2,537,039 for the same period in 2020, reflecting a decrease of 54%[14] - Operating loss for the three months ended June 30, 2021, was $(1,082,924), compared to $(1,132,254) for the same period in 2020, showing a slight improvement[14] - Net income for the three months ended June 30, 2021, was $1,470,425, compared to a net loss of $(1,134,429) for the same period in 2020[14] - For the six months ended June 30, 2021, the company reported a net loss of $35,125 compared to a net income of $524,049 for the same period in 2020[20] - Total revenue for 2021 was $7,400,000, a decrease from $9,755,000 in 2020, representing a decline of approximately 24.4%[88] - Operating loss for 2021 was $(2,702,000), compared to an operating loss of $(1,024,000) in 2020, indicating a worsening performance[88] - The company reported a pretax loss of $(34,000) for 2021, a significant decline from a pretax loss of $(1,006,000) in 2020[88] Assets and Liabilities - Total current assets increased significantly to $26,256,158 as of June 30, 2021, from $11,789,957 as of December 31, 2020[11] - Total liabilities decreased to $14,716,706 as of June 30, 2021, from $16,810,353 as of December 31, 2020[11] - Current assets as of June 30, 2021, were adjusted to $23,941,022 after the sale of the 555 Building, down from $26,256,158[94] - Total liabilities decreased to $5,451,300 post-sale, reflecting the payoff of the mortgage related to the 555 Building[94] - Stockholders' equity increased to $31,153,168 following the sale, with retained earnings improving to $4,012,247[94] Cash Flow and Investments - The company experienced a significant cash outflow from operating activities, totaling $1,850,873 for the six months ended June 30, 2021, compared to $510,043 in the prior year[20] - The total cash and cash equivalents decreased from $7,699,335 at the beginning of the period to $5,387,896 at the end of the period[20] - Cash flows from investing activities included capital expenditures of $(118,471) for the six months ended June 30, 2021[20] - The company recorded a gain on debt extinguishment of $2,443,418 due to the forgiveness of a Paycheck Protection Program loan[61] - The company sold its facility at 555 North Research Place for $24,360,000, resulting in net proceeds of approximately $14,000,000 after settling existing mortgage debt[26] Research and Development - Research and development expenses for the three months ended June 30, 2021, were $128,512, up from $96,108 in the same period of 2020, indicating a 33.6% increase[14] - The company has decided to eliminate further investment in the Tantaline product line due to forecasted continued losses and negative cash flows[26] - The company recorded an impairment charge of $3.6 million related to Tantaline long-lived assets during the fourth quarter of 2020[26] Stock and Equity - The company reported a basic income per share of $0.22 for the three months ended June 30, 2021, compared to a loss of $(0.17) for the same period in 2020[14] - The company granted 150,000 stock options during the six months ended June 30, 2021, with a vesting schedule of 25% per year over four years[68] - As of June 30, 2021, the company has a total of 560,000 outstanding stock options, of which 390,000 were exercisable[70] - The total unrecognized compensation costs related to stock options as of June 30, 2021, amounted to $385,960, expected to be recognized over a weighted average period of 3.9 years[72] - The company granted 42,800 restricted stock awards during the six months ended June 30, 2021, with 38,054 shares unvested at the end of the period[73] - The total fair value of vested restricted stock units was $29,700 for the six months ended June 30, 2021[75] Customer Concentration and Revenue Recognition - Revenue concentration was notable, with one customer representing 18.0% of total revenues for the six months ended June 30, 2021[39] - As of June 30, 2021, two customers accounted for 20.2% of the accounts receivable balance, down from 35.0% at December 31, 2020[40] - The company has unrecognized contract revenue of approximately $3.2 million expected to be recognized within the next twelve months[48] - Contract assets increased by approximately $0.6 million during the six months ended June 30, 2021, compared to an increase of $0.4 million in the same period of 2020[51] COVID-19 Impact - The company continues to monitor the impact of COVID-19 on its operations and financial condition, with ongoing evaluations of government assistance programs[89] - The company plans to evaluate government-sponsored plans related to COVID-19 to leverage available benefits[89] - New orders in Q2 2021 were approximately $6,000,000, showing a recovery compared to the substantial reductions experienced in early 2020 due to COVID-19[89]

CVD Equipment Corporation (NASDAQ:CVV) Q1 2021 Earnings Conference Call May 13, 2021 4:30 PM ET Company Participants Emmanuel Lakios - President and CEO Thomas McNeill - CFO Conference Call Participants Brett Reiss - Janney Montgomery Scott Operator Greetings, and welcome to CVD Equipment 2021 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. We will begin with some prepared remarks follo ...

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1 – Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201%20%E2%80%93%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for Q1 2021 reflect a net loss of $1.5 million and decreased assets due to reclassification of the 555 Building to assets held for sale [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $39.2 million by March 31, 2021, primarily due to reclassification of the 555 Building to assets held for sale Condensed Consolidated Balance Sheet Highlights (at March 31, 2021 vs. December 31, 2020) | Balance Sheet Item | March 31, 2021 ($) | December 31, 2020 ($) | | :--- | :--- | :--- | | **Total Assets** | **39,205,534** | **40,935,925** | | Cash and cash equivalents | 5,929,363 | 7,699,335 | | Assets held for sale | 16,181,368 | 0 | | Property, plant and equipment, net | 12,460,305 | 28,843,563 | | **Total Liabilities** | **16,535,139** | **16,810,353** | | Liabilities held for sale | 9,218,683 | 0 | | Long-term debt, net of current portion | 2,415,970 | 13,106,057 | | **Total Stockholders' Equity** | **22,670,395** | **24,125,572** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss of $1.5 million for Q1 2021, a significant decline from prior-year net income, driven by a 44.3% revenue decrease Statement of Operations Summary (Three Months Ended March 31) | Metric | 2021 ($) | 2020 ($) | | :--- | :--- | :--- | | Revenue | 3,365,860 | 6,036,360 | | Gross Profit | 318,580 | 1,935,524 | | Operating (Loss) Income | (1,618,787) | 108,161 | | Net (Loss) Income | (1,505,550) | 1,658,478 | | Basic (Loss) Income per Share | (0.23) | 0.25 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $1.6 million in Q1 2021, resulting in a $1.8 million net decrease in cash and cash equivalents Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2021 ($) | 2020 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,571,666) | (675,238) | | Net cash used in investing activities | (26,744) | (422,435) | | Net cash (used) in financing activities | (171,562) | (166,878) | | **Net decrease in cash and cash equivalents** | **(1,769,972)** | **(1,264,551)** | | Cash and cash equivalents at end of period | 5,929,363 | 7,399,702 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail strategic shifts, including a new CEO, the planned sale of the 555 Building for $24.36 million, customer concentration, and COVID-19 impacts - In January 2021, a new CEO was appointed to change direction, focusing on the core equipment business and minimizing or ceasing parts of the Materials Business due to continued losses[29](index=29&type=chunk) - The company entered an agreement on March 29, 2021, to sell its 555 Building for **$24,360,000**; proceeds will be used to pay off the building's **$9.2 million** mortgage and for working capital[32](index=32&type=chunk)[67](index=67&type=chunk) - Revenue is recognized over time using a cost-based input method, where revenue is calculated based on the ratio of costs incurred to date to total estimated costs[33](index=33&type=chunk) - For Q1 2021, one customer represented **30.7%** of revenues; in Q1 2020, three customers represented **27.1%**, **21.5%**, and **19.3%** of revenues, indicating significant customer concentration[44](index=44&type=chunk) - The COVID-19 pandemic has caused substantial reductions in new order levels through Q1 2021, materially and adversely affecting revenues, particularly from the hard-hit aerospace sector[89](index=89&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 44.3% revenue decline in Q1 2021 due to COVID-19, strategic shifts, and the planned sale of the 555 Building to improve liquidity - Overall revenues have declined from **$41.1 million** in 2017 to **$16.9 million** in 2020, with cumulative operating losses of **$14.5 million** from 2018-2020[99](index=99&type=chunk) - A new CEO was appointed in January 2021 to revise the business strategy, focusing on the core equipment business and ceasing further investment in the loss-making Tantaline product line[101](index=101&type=chunk) - The company entered into an agreement to sell its 555 Building for **$24,360,000** to increase liquidity and provide working capital, with proceeds first satisfying the **$9.2 million** mortgage on the property[104](index=104&type=chunk) - Management believes that cash, cash flow from operations, and proceeds from the building sale will be sufficient to meet working capital and capital expenditure needs for the next twelve months[135](index=135&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2021 revenue decreased by 44.3% to $3.4 million, driven by declines in CVD Equipment and SDC segments, leading to a compressed gross profit margin and operating loss Revenue by Segment (Three Months Ended March 31) | Segment | 2021 Revenue ($) | 2020 Revenue ($) | Change ($) | | :--- | :--- | :--- | :--- | | CVD Equipment | 2.0M | 4.1M | (2.1M) | | SDC | 0.8M | 1.6M | (0.8M) | | CVD Materials | 0.6M | 0.3M | +0.3M | | **Total** | **3.4M** | **6.0M** | **(2.6M)** | - Gross profit margin decreased to **9.5%** in Q1 2021 from **32.1%** in Q1 2020, primarily due to the impact of a **$2.7 million** sales decrease and fixed costs[111](index=111&type=chunk) - General and administrative expenses increased by **$0.2 million** to **$1.7 million**, mainly due to a **$235,000** increase in legal costs related to corporate governance and the sale of the 555 Building[115](index=115&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital stood at $12.3 million with cash at $5.9 million as of March 31, 2021, with liquidity plans including a PPP loan and the 555 Building sale - Working capital was **$12.3 million** at March 31, 2021, compared to **$8.1 million** at December 31, 2020; cash and cash equivalents decreased to **$5.9 million** from **$7.7 million**[121](index=121&type=chunk) - The company obtained a **$2,415,970** PPP loan in April 2020, with an application for forgiveness filed in April 2021, anticipating substantial forgiveness[131](index=131&type=chunk)[132](index=132&type=chunk) - The sale of the 555 Building for **$24,360,000** is key to improving liquidity, with proceeds intended for general working capital after satisfying the building's **$9.2 million** mortgage[134](index=134&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company for the current reporting period - Not applicable[138](index=138&type=chunk) [Item 4 – Controls and Procedures](index=30&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[139](index=139&type=chunk) - No changes in internal controls over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[140](index=140&type=chunk) [Part II - Other Information](index=31&type=section&id=Part%20II%20-%20Other%20Information) [Item 1 – Legal Proceedings](index=31&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company reported no legal proceedings during the current reporting period - None[144](index=144&type=chunk) [Item 1A-Risk Factors](index=31&type=section&id=Item%201A-Risk%20Factors) The company did not report any new or updated risk factors in this filing - None[146](index=146&type=chunk) [Item 6 – Exhibits](index=31&type=section&id=Item%206%20%E2%80%93%20Exhibits) Key exhibits include the 555 N Research Place property sale agreement and CEO/CFO certifications - Exhibit 10.1: Agreement to Purchase and Sale for the building and real estate property located at 555 N Research Place, Central Islip, NY, dated March 29, 2021[153](index=153&type=chunk) - Exhibits 31.1, 31.2, 32.1, and 32.2: Certifications by the Chief Executive Officer and Chief Financial Officer as required by the Sarbanes-Oxley Act[153](index=153&type=chunk)[156](index=156&type=chunk)

CVD Equipment Corporation (NASDAQ:CVV) Q4 2020 Earnings Conference Call March 31, 2021 4:30 PM ET Company Participants Emmanuel Lakios - President and Chief Executive Officer Thomas McNeill - Chief Financial Officer Conference Call Participants Brett Reiss - Janney Montgomery Scott Operator Greetings, and welcome to CVD Equipment 2020 Fourth Quarter and Year End Results Conference Call. At this time, all participants are in a listen only mode. [Operator Instructions] As a reminder, this conference is being ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________ Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ___ to _____ Commission file number: 1-16525 CVD EQUIPMENT CORPORATION (Exact name of registrant as specified in its charter) New York 11-2621692 ( ...

Financial Performance - Total revenue for Q3 2020 was $3,993,204, a decrease of 30.0% compared to $5,704,882 in Q3 2019[14] - Gross profit for Q3 2020 was $435,791, down 68.9% from $1,399,823 in Q3 2019[14] - Operating loss for Q3 2020 was $(1,392,653), compared to $(248,571) in Q3 2019, reflecting a significant increase in losses[14] - Net loss for the nine months ended September 30, 2020, was $(767,591), compared to $(3,707,685) for the same period in 2019[14] - For the three months ended September 30, 2020, the net loss was $1,291,641 compared to a net loss of $138,009 for the same period in 2019, indicating a significant increase in losses[16] - Total consolidated revenue for the nine months ended September 30, 2020, was $13,748,000, a decrease from $14,100,000 in the same period of 2019, representing a decline of approximately 2.5%[68] - Operating loss for the nine months ended September 30, 2020, was $(2,417,000), compared to an operating loss of $(4,357,000) for the same period in 2019, indicating an improvement in operational performance[68] Expenses and Liabilities - Research and development expenses decreased to $90,227 in Q3 2020 from $112,724 in Q3 2019, a reduction of 20.0%[14] - Total current liabilities decreased to $3,490,592 in September 2020 from $5,388,081 in December 2019, a reduction of 35.2%[10] - Total stockholders' equity decreased to $29,390,368 in September 2020 from $29,957,845 in December 2019[10] - Total operating expenses for the three months ended September 30, 2020, were $1,828,444, an increase of 10.9% from $1,648,394 in the prior year[14] - The company reported stock-based compensation of $200,114 for the nine months ended September 30, 2020, compared to $476,458 for the same period in 2019, showing a decrease of about 58%[19] Cash Flow and Assets - Cash and cash equivalents decreased to $8,187,497 in September 2020 from $8,664,253 in December 2019[10] - The total cash and cash equivalents at the end of the period were $8,187,497, down from $6,739,065 at the end of September 30, 2019, reflecting a decrease of approximately 21.5% year-over-year[19] - The net cash used in operating activities for the nine months ended September 30, 2020, was $1,188,504, compared to $2,092,962 for the same period in 2019, indicating a decrease of about 43%[19] - The company had total inventories of $1.444 million as of September 30, 2020, down from $1.710 million at December 31, 2019[49] - The company’s retained earnings decreased to $2,404,463 as of September 30, 2020, from $3,172,054 at December 31, 2019, reflecting the impact of operational losses[10] Customer and Revenue Insights - During the three months ended September 30, 2020, two customers accounted for 26.0% of total revenues, while in the same period of 2019, two customers represented 42.8%[38] - The Company reported total revenues of $3.0 million for the three months ended September 30, 2020, compared to $5.7 million for the same period in 2019, reflecting a decrease of approximately 47%[41] - The Company has unrecognized contract revenue of approximately $2.7 million at September 30, 2020, expected to be recognized within the next twelve months[45] - The company’s revenue disaggregation showed aerospace revenue of $1.433 million for the three months ended September 30, 2020, compared to $2.506 million in 2019[41] Debt and Financing - The Company entered into a loan agreement for $2.4 million under the Paycheck Protection Program, maturing on April 21, 2022[57] - The Company has a long-term debt balance of approximately $2.1 million as of September 30, 2020, down from $2.4 million at December 31, 2019[51] - The Company recognized approximately $1.5 million of a tax benefit due to the CARES Act, with $0.8 million as a receivable at September 30, 2020[60] Impact of COVID-19 - The aerospace sector, which significantly impacts the company's business, has faced substantial reductions in new orders due to the COVID-19 pandemic, affecting revenue levels[70] - The Company experienced a significant reduction in new order levels during the first nine months of 2020, impacting revenues starting in the second quarter[70] - The company has been actively monitoring the impact of COVID-19 and plans to evaluate government-sponsored programs to mitigate financial impacts[70] - The company intends to continue monitoring developments related to COVID-19 and adapt its strategies accordingly to navigate the ongoing challenges[70]