CVD Equipment (CVV) 12 Nov 192019 Q3 Earnings call transcript

Greetings, and welcome to the CVD Equipment Corporation Third Quarter 2019 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It’s my pleasure to introduce your host, Len Rosenbaum. Please go ahead, sir.

Good afternoon, everyone and thank you for joining our earnings call. New the and was facility running, moving California during materials getting backup focus pursuing from up three facility starting to company’s third sales. on quarter our after additional The equipment and York on MesoScribe $X.X CVD The to of in building expenses and XXXX. nine months $X.X million during improvements, company million XXXX and machinery has other first invested Materials, related in the

operating and and glad Tantaline’s continues I’m is to installed MesoScribe to tested. now say, be equipping

our marketing increase for equipment We sales. to have efforts and materials continued

and now showcasing coating for will Tantaline corrosion materials, Materials are for expanded applications. into existing and gas applications; our sensors We providing and coatings, through medical other MesoScribe material aerospace for through operations offering services and our customers. medical, applications; coatings facility pharma, material enhance material carbon subsidiary through and further composite defense, industrial substrate turbine in coatings operations electronic our oil materials aerospace capabilities defense, expansion for to CVD and new resistant The and

have fluid device. an collaboration be and on pending at this our on and patent Brook the membrane with extracorporeal University application. technology our further of Stony Center novel reactor working this quarter will to done technology testing We further technology additional anticipate improved oxygenation We continued for Biotechnology promising

further quarter, in both manufacturing the and material should on U.S. continue Tantaline working improvement During we equipment fourth start being will operational sales. and

of for equipment markets materials flatten growth high corrosion medical, levels anticipate We will margin sales. defense our in help aerospace resistance, the the uneven and coatings

returning to results. orders and expenditures We we will committed and monitor quarterly continue to remain profitable to

to would like to over our Tom CFO, McNeill. I With turn the that, call

in $X.XX $X as third or net share loss of In revenue to quarter, our as diluted million increase million million net share XXXX, compared was or third was Len. an our $X.X quarter compared million the you, XXXX. or per $X.X $XXX,XXX per And diluted $X.X of third $X.XX a in XX.X%. the quarter Thank loss to

nine of $X.XX $XX.X as as $XX.X revenues $X.X in $X.X our compared diluted a XXXX net compared decrease million per month first share $X.X months XX.X%. $X.XX the of was a nine were or XXXX. to And to of Our loss diluted or loss million million share or million million in net

of of year Our revenue increases equipment increase as in the third $X.X primarily this million parts result spare to period quarter in sales. compared was ago the and

million timely replace large and the completion For months revenue fashion. was a of the orders nine decrease $X.X them attributable in equipment XXXX to able being of to the of primarily not

quarter sequential Our $XXX,XXX revenue which revenue the sequential an was million $X.X QX million increased in XX.X%. – $X.X of of QX or third quarterly of or quarterly our it and second is to increase increase $X.X XX%, million,

XX%. we $X.X June million, or third million backlog, of in $X.X received during compared order XX, as was quarter, to compared to at million QX $X.X of million September With in million the as QX of which increase XXXX. XX lifted $X.X orders, $X.X million approximately respect to new orders an and at $X.X This

as our quarters in is as cost measures margin of Two, revenue efficiencies. margins quarter first XX% improved one, second the have mix the we XXXX, the containment to lastly, quarter, profit XXXX, This result gross of to XX% contribution improved to revenue. XX% compared of respect in negative improving this With operating taken. increased we prior product Three, that and quarter of two percent, the XXXX. and the compared to in

of decrease the earn-out final $XXX,XXX the our to contingent third our acquisition. quarter. includes have expenses, Turning the this expenses effects containment a sequential a in measures to in resulted our operating MesoScribe operating cost decrease recovery $XXX,XXX related This one-time year of of during

third quarter progress related the we quarter the we income, substantially toward other facility. to we to that CVD Company Materials our respect this With of return $XXX,XXX has again Overall, a the income XXXX in made profitability. recognize progress rental believe in to

With $X.X XXXX. September at respect to XXXX, at Working cash compared was million $XX.X as decrease December as compared $X.X XX, net reduce December at to months million results cash at XX, to million XX, $XX.X and in and XX, September to $X.X million. equivalents decrease capital XX, overall liquidity, loss. nine million a were ended our for revenue was XXXX, XXXX, This September of the the attributable XXXX primarily

$X.X service includes Materials payments talked related CVD Materials CVD improvements, about approximately before investment building on related machinery building. and our our million of for Len of that debt in our payments invested operation to the capital to – which primarily $XXX,XXX, the

our decrease expected at requirements fourth for cash capital working measures, months. to believe our gross to and the is than quarter, the two during our cash meet quarters. order next last expenditure rate a and provide us We improved the quarter much sufficient margins While capital next improved slower flow, containment XX the cost profit albeit

Now the to I’d turn questions. call back like to for your over the operator

Thank you.

[Operator with be first is Montgomery question-and-answer coming question Janney today Instructions] now from Scott. session. will a We conducting Our Brett Reiss

now live. is line Your

of Hi, legacy Len. Tantaline new business you? the handling it embedded MesoScribe The bookings is are Tom. that? of million, all business or How there a material and is Hi, $X.X in component the

of that is some both There number. embedded in

or is want break you what to that out? that share you Can don’t

parts, is but business we of exist core you tell could component et a the the There $X.X SDC. I primarily today. million it with is is as appreciably What service, cetera, it’s materials, equipment sales,

Okay.

the use Tantalite, industry medical economy, the to industry? make Now new of are potential a products, it does decision in oil business, new businesses customers service, these to Tantaline to your the different is for vary from time sectors various

to industry also it not and I’m will to customer concerned. from industry sure And vary I’m customer. from overly

getting that new The let’s to, customers and used to or out first existing them year, try it. be a customers it, of six also lot we’ll months say, a have product to for

can immediately? fully the operational quarter, flow in are new start facility Tantaline for much fourth the the So operations pretty in when Tantaline order

be probably first the quarter. won’t fully the more in fourth half fourth year We will be going of to one fully next operational of everything they the operational in in. most operational. They’ll start to take than got get quarter. It Well, system us

right. right, Right,

Now you dropped had in a they get that real with the manning saw were people, what I’m do were – order Or booth reached and Len, flow and Center, you They’re – observed doing be were there’s going to did? sense testing salesman. your I and these Javits, kind Javits curious that good the get Tantaline interacting offerings that the to very that waters? you of traffic, people from marketing at where your of at I but you were I do at good just and out booth that the are a kind people you sense a you

We real are are wouldn’t selling how we that that a out be to, market there’s samples to aspect is business customers, sent Center the us. are doing others, there Javits trying trade there investing shows we’re of the there the we and was There this. are The salespeople way for only to go Jacob we products. we out there didn’t behind if feel one get

me. than one Center. just the Excuse – more it’s Javits Jacob So

reductions? quantify all with further your And finished that you or might for can what there you cost is room Are be? containment

Yes, Brett.

I it – ends. think we’re never

looking one. materials can it I everything and our new to with And think we better, related you’re we’re number constantly resources two, always more orders build we the efficiently, balance how then at do looking faster, from at out as side.

like never-ending a any other company process. just there. It’s So out – it’s

looking. always You’re

to the robust in that If to being didn’t level, have returns revenues cost-cutting volumes right. might fat, a able have in? done, that business additional at Right, impact into service trimmed eat the come bone might you basically but you that you you’ve

beneficial the hirings personnel as company. Hopefully, to that orders are look never we’ll going the additional to up. we very Well, reduce keep announce

Are tenant gave have think a Okay. release attempting back the to the replacement a you – vigorously tenant? that And I space. half was find that there you in

both the We just XX, Yes. at we our – end it. of able He’s to get broker and quickly, has spaces. the it. out reasonably pursuing year, the – And we’re like tenant’s December

you’re Brett, quite picture, is tenant a it’s but doing a fill – space, costs, component get have never helps we desirable focus. it sure overall that the to of can be in, it going broker this a You very lower our just high again, when And but it’s it. to not right ceilings. It’s

you. Thank

from Howard, Private is Martin Investor. a coming Our next question

Your line now live. is

it. out Hi. we’d be was $XXX going two of in were I quasi-desert getting the Moses years? the been being million, And it. in five I ago Does Meso million. But five years, doing you guy to feel potential when like – $XX the annual Obviously, the in for years and to talked we’ve have we’re meeting not in million, about we a say that and what, came a desert thing million that hoping do four, a we’re bought three, sounds – or so that. division hope three. of that XX $X $XX of sexy for it, sort

The answer otherwise. would have it to outright is okay. that pursued We not yes,

good. That’s Okay.

can glasses it’s like years? that – see need or will you don’t to $X something if four a when in see you that So or we be to going three see? number When million we will

materials materials Well, the in hopefully, going right now, operations, it’s up. the and with merged see numbers you’ll

now or comments. over Thank to of I’d session. back floor closing or our you. any question-and-answer I for will back further reached closing like management turn to the [Operator over floor for further end Instructions] the comments. the We’ve turn management to any

earnings look forward quarter. Thank to for you you, you. and call, the joining Thank next I speaking everyone, to

does Thank conclude today’s you. That teleconference.

thank your participation this at We line your and wonderful disconnect may for have today. you day. a You time,