CVD(US:CVV)2023-05-14 16:00Part I - Financial Information This section presents the unaudited financial statements and management's analysis of financial condition and results of operations Item 1 – Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, highlighting a significant revenue increase but continued net loss and a slight decrease in total assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $20,554 | $23,658 | | Total Assets | $34,784 | $37,912 | | Total Current Liabilities | $4,888 | $8,164 | | Total Liabilities | $5,217 | $8,513 | | Total Stockholders' Equity | $29,567 | $29,399 | Condensed Consolidated Statement of Operations (in thousands, except per share data) | Metric | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :--- | :--- | :--- | | Revenue | $8,695 | $4,656 | | Gross Profit | $2,434 | $770 | | Operating Loss | $(187) | $(970) | | Net Loss | $(40) | $(997) | | Loss per common share - basic & diluted | $(0.01) | $(0.15) | Condensed Consolidated Statement of Cash Flows (in thousands) | Cash Flow Activity | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,272) | $(1,420) | | Net cash used in investing activities | $(146) | $(195) | | Net cash from (used in) financing activities | $54 | $(1,766) | | Net decrease in cash and cash equivalents | $(3,364) | $(3,381) | Notes to Condensed Consolidated Financial Statements These notes detail accounting policies, revenue recognition, significant customer concentration, and segment performance, along with stock-based compensation and deferred tax assets - The company recognizes revenue from system sales over time using an input method based on the ratio of costs incurred to date to the total estimated costs at completion100 - In Q1 2023, three customers represented 28.3%, 15.9%, and 10.6% of total revenues, indicating significant customer concentration4 - The company has unrecognized contract revenue of approximately $10.1 million as of March 31, 2023, expected to be recognized within the next twelve months6 Revenue by Market - Q1 2023 (in thousands) | Market | Revenue | | :--- | :--- | | Energy | $2,530 | | Industrial | $3,883 | | Research | $1,767 | | Aerospace | $515 | | Total | $8,695 | Segment Operating Results - Q1 2023 (in thousands) | Segment | Revenue | Operating (Loss) Income | | :--- | :--- | :--- | | CVD Equipment | $5,845 | $138 | | SDC | $2,312 | $631 | | CVD Materials | $667 | $81 | | Corporate | - | $(1,037) | | Consolidated | $8,695 | $(187) | Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 87% revenue increase in Q1 2023, improved gross margin, and reduced operating loss, alongside a decrease in order backlog and strategic focus on electrification and aerospace markets - The company's core strategy is to focus on growth market applications related to the "electrification of everything" (e.g., for EVs) and aerospace (e.g., for next-gen jet engines)22 - Order backlog decreased from $17.8 million at Dec 31, 2022, to $12.0 million at March 31, 2023, as revenues outpaced new orders28152 Q1 2023 vs Q1 2022 Performance (in thousands) | Metric | Q1 2023 | Q1 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $8,695 | $4,656 | +87% | | Gross Profit | $2,434 | $770 | +216% | | Gross Margin | 28.0% | 16.5% | +11.5 pts | | Operating Loss | $(187) | $(970) | -81% | | Net Loss | $(40) | $(997) | -96% | - The increase in revenue was primarily driven by a 107% increase in the CVD Equipment segment, largely from revenue recognition on PVT150 systems185156 - Management is evaluating the disposal of its Tantaline subsidiary in Denmark to focus on the core equipment business, which may result in a financial charge of up to $500,000174192 Item 3 – Quantitative and Qualitative Disclosures About Market Risk This section indicates no new or material quantitative or qualitative disclosures about market risk are applicable for the reporting period - The company states that this item is not applicable197 Item 4 – Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting identified 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 reporting period58198 - There were no changes in internal controls over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the controls199 Part II - Other Information This section provides disclosures on legal proceedings, risk factors, and other miscellaneous information not covered in Part I Item 1 – Legal Proceedings The company reported no legal proceedings during the reporting period - The company reported no legal proceedings40201 Item 1A – Risk Factors The company reported no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K filed on March 27, 202368 Other Part II Items This section covers standard disclosures, reporting no unregistered sales of equity, no defaults, and no other material information, with mine safety disclosures being not applicable - Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), and Item 5 (Other Information) are all reported as "None"6970202 - Item 4 (Mine Safety Disclosures) is reported as "Not applicable"42203 - Item 6 lists the exhibits filed with the Form 10-Q, including officer certifications and interactive data files (XBRL)43205 Signatures This section contains the required signatures for the filing, certifying the accuracy and completeness of the report