CVD Equipment (CVV) 14 May 212021 Q1 Earnings call transcript

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 followed by a question-and-answer session. Presenting on the call today will be Emmanuel Lakios, President and CEO; and Thomas McNeill, Chief Financial Officer.

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

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

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

to the would like turn I call Manny. over Now, to

President. you. presenting I'm information CVD Welcome quarterly and Corporation's call. pleased name our business. developments to Thank related is regarding CEO Lakios, to Equipment My be important today to Emmanuel pertinent you conference company to And and

end you request XXXX As our who will question-and-answer we our introduce We to first Thomas are our you McNeill, that will like at during financial quarter us. be would providing to wait the a your subset Mr. thoughts of information provide session. summary. important your CFO, to ask I questions

Manny. you, Thank

compared profit substantially revenues decrease negatively quarter the XXXX, $X the quarter is million quarter COVID-XX gross COVID-XX net million, income in sales, resultant quarters in in of the of affected of as result reduction quarter in and in of XXXX, to first pre bookings a a pandemic of the This CVD’s in which of reduce lower the pandemic first revenue million the first our new XX.X%. $X.X subsequent resulting $X.X which XXXX commencing As era decrease first water our or XXXX.

the quarter million or diluted per or the to income $X.X loss a of $X.XX diluted of XXXX. first XXXX million $X.X first net net compared as share $X.XX Our for of share, quarter in per was

Let me note CARES the the of an for favorably Act, the recognizing by of million quarter benefits. that carry CVD which allowed during NOLs of CVD XXXX income first back resulted tax impacted in $X.X and was

to of new backlog the $X.X XXXX The in effects quarter CVD negative to compared to $X.X XXXX, loss increased decreased the the compared of December including related of million XX, fourth million March the $X.X million as million orders first net the impairment at XXXX As exclusive million continues as is and $XXX,XXX the COVID-XX by XXXX XX, product compared reductions line. $X.X charges that to pandemic I the experience at to before. the It's Tantaline since improved revenue $X XXXX. quarter fourth company to due significant of $X.X first CVD’s by company's the to mentioned in $XXX,XXX of as of quarter to million and of net quarter loss $XXX,XXX

ongoing to our previously into discussed and the building by and call improvements necessary at industry into sales the which business markets, in to be has March 'XX. activity liquidity our also the respect improved And benefited operations. and the to XXXX. XXXX, to as However, announced QX support are company's indicate water recovery improvements With provide increase in expected slow capital conference in year-end quarter longer-term ended XX, both order to and reports our XXXX working its aerospace

of portion used capital the in to mortgage buyer be excess XXXX conditions central of the purchase determined. to York. may satisfy proceeds working to also reflected million of of about sell used March the at property, building business of move Principles in amount $XX,XXX,XXX them the of In Place is building. Accepted March completed waiver general short-term sell existing On amount our to to to additional amount XXXX, And long-term both line approximately into to GAAP mortgage $X.X we of debt, subject Also, current will With an XXX, And to been assets. present certain satisfied. escrow Tantaline entered respect the would A Generally long-term previously not our will debt. determined In the million equipment XX, an approximately product needed of extend of million related to decided which future for up an the amount April the which pay million. accordance was March XXX costs or we XX, is the previously our to as be on building at XX, XXXX have any and sale, X.X with of for XX $X.X We $XX.X require is Islip, various located requirement USA building of for which sale closing we current days to put agreement advise carrying thereafter, consolidation XXX as the price transaction closing North or New debt building the XX, and Research be for in and classified a The this Accounting XXXX. us satisfaction plant May in and date reflected assets in which assets purposes. XXX operations. which previously our facility to or proceeds XXX and XXXX, into have or now was held contingencies, at the of reflected value

ceased. functions the United Denmark Tantaline been States into and to of product office, Tantaline line While all related have the consolidated the expenses have

sale and the is be expected XXX is June Once into ongoing to and we completed, completed savings. of by has both building of end operations Our commenced, anticipate achieving the the consolidation MesoScribe the XXXX.

intensive the and analysis, materials CEO to a minimized should our focus elements the business. primary believe for our we cash of or implemented With further resulting we And should entire potentially January, on of the and upon we Tantaline product to Manny, operations, we costs. of and which our that eliminate losses million XXXX, analysis consequence, materials million our began the line. in additional approximately ceased. a investment analysis including in January be is upon in avoidance forecasting Based be negative Based strategy business our in were as the current business, line, its core that flow with plans of product continued business appointment $X new equipment Tantaline in revised some $X.X

recorded an noted we have the we previously addition, year-ended million impairment as in $X.X fourth quarter charge, In XX, XXXX. December and

and divisions to in the ROI driven profits in future. are achieve all operating We

selling our $XX.X December liquidity, XX, of result our million as XX, cash $X.X XX, the $X.X the long-term we the cash of building XX%. capital of increase at part million XXXX by classifying will our to XXXX. to and in XX, or in $X.X resulting March related expect Working which Turning and an liabilities assets near-term, This net for as million term, loss XXXX $X.X quarter million actions million. offset close was December XXXX. at the to and million at compared were $X.X the building equivalents That's March at compared the in short to to in is

future ceasing In of the addition, our to of amount $XX,XXX be further our of CARES predicted. million tax benefits, for impacts uncertain all expected are from USA the our CapEx we QX QX the NOLs. longer-term the line. COVID-XX from are XXXX The this XXXX, to quarter. $X.X Act of waiting which or on just anticipate substantially and approved substantially $XXX,XXX in Related this April cannot receivable to And the we balance product Tantaline And carry outbreak all quarter PPP allowed have reduced in loan in be highly the applied from XXXX. to forgiven. forgiveness respect we in $XXX,XXX With spend backs

reduction business upon other these the equipment the factors, among expenditure sale of all The as our Based well of believe improvements facilities. flow our of building from dependent we sufficient of in the working requirements. interest and ongoing lessening new and is as And expense, our our things, the managing XXX as consolidation capital and efficiencies the upon capital market. of expenses. profitability to operating cash COVID-XX plans, be receipt operations centralized cash and to and and our operational that cash return CapEx the effects such of meet Our will orders, positions aerospace equivalent

operations continue loan Should our CEO. to now our and longer covenants. months turn the call filing For to this Manny, working back of anticipated as to current assess actions continue as the our well the we XX to operating the capital worsen, with will the like compliance environment or to Form next needs our take cash support I'll maintain XX-Q. of

for Tom, your you presentation insight. and thank

COVID As it we to be of the will is quarter, are XXXX the optimistic wane. pandemic completed cautiously and that first effects forecasted our contained we eventually

global the markets. be sign have to over economy that We worst served monetized. cannot The is damage done a the for

not was to this immune Our pandemic. COVID business

certain is equipment cascading our respond engine and area have air the We recovery CVD that effect the impact astounding of aerospace, components. poised advanced in for turbine of timing to the Equipment been uncertain. is is to travel come major global eventually. what be aerospace back The material with market, and services. and gas back ready travel sync set demands in and the But is of will will specifically to global new

industry be rate continue recovery supporting beginning what and XXXX. receive in a We to would of order to customer input reports our news

and products and other recovery. showing such serving as are research carbon-based our the markets Our markets academia of signs products, legacy

is during recovery, building in remain Even sale of cautious the after signs The available University of XXX next as our the we being on becoming plan funding closing and with for shuttered Labs the planning. is reopened the in months. As pandemic.

to fixed the equipment infrastructure areas. order to lines. and products expenses we rate, on System I would We group QX provided like reduce FirstNano thoughtful March, legacy our the company. wisely some the orders. cost spend time and our model continue to received The will product of we in will the for measures take Depending capital on sustainability all use growth in evaluate

was again. recovery orders that up was orders, in in the started which even up indicating modest. service are showed is recovery rotation our The are and being parts spare though level that our for Our QX, production indicators leading some systems also

with Our we key using Through account as increased and to markets are recovery management, slowly and existing better signs and position future ourselves are this more of reset effective showing our previously period post-pandemic customers. noted.

instrumentation continues we XXXX, focus such engine high Our on environments in turbine to satellites. MesoScribe as challenging Group, acquired gas which very temperature and in in

Grant II develop we’re the gas $XXX,XXX facility. manufacturing Phase turbine SBIR our additional positive. of and profitable process an received for to our facility components. operation we've for of additive is the QX, The During engine cash application XXX Presently, from consolidating technology the further group MesoScribe into in XXX flow

We was Denmark, as expect the product company the in well as that will Tantaline, in market our XXXX. on QX invested U.S. then, XXXX. plan that in is in facility. in had Since end operational the completed for the the and be in of expansion line acquired capability

Our has that for the next Denmark is evaluation years. capacity ample facility

minimize to is the any be line to cash and objective have further requirements. Tantaline investment neutral Our product

that activities the will expect sales along line neutral. Tantaline have the corner on the and obtaining These facilities have flow continued During we product turn our Denmark focus costs operating into marketing should actions and cash and with all reduced and the operations. we U.S. QX, orders, consolidate

in has also in near-term We’re in operation any facility reducing be requirements. lease, landlord with and required extend been to serve Denmark investment discussion the The determined market. Tantaline our not to USA was Tantaline the to

and product Our systems. captive division and be gas supplier liquid of both to SDC continues and a merchant delivery line

our are products supplier marketplace. be standard the They’re to also facilities considered division SDC to and in a further our equipment in-house a Our fulfill requirements.

our are and that in Oxygenation, At as novel optimistic informed recent Extracorporeal developments One notable and ECMO many specifically, the has of summary, time, to With components. well we'll we’re the the there served is has increased no transfer such. this blood of, application and keep applications rate flow speak and United worst continues primarily developed gene for The additional the lab In overseas. due to oxygen the Membrane applications is be to markets great to SDC over customers slowly division ECMO. In there's This home as build-out States you U.S. reported as will are in quotation order products, that we is such past, recover. the more cautiously initiatives, the positive. both technology as cash the fabs the

scrutiny our apply our products We the in with financial of area spending. of and customers continue focus to

are customers employees Our and loyal.

We’re to one-time growth. conditions operational and and the event, we Hence, and be focused Corporation, is done the evolve a profitability Teitelbaum, plan, structured on a expect X and assessment he to as market resigning his our planning we continued business notified Planning May XXXX, immediately. not throughout that for change. of but in continues Equipment On Director effective Martin execution was of of position a the XXXX. phase CVD member directors board as of board the our J.

say in July the We announced to comments we to continue that, that important continue annual would our you We’ll communication your us. to are on be committed With meeting provide We I we timely have XX. matter, have accepted questions communicate may that to meanwhile. such to will developments shareholder held and resignation. important that

like With our floor to questions. the of open close presentation, your to the we’d

through. walk can You

Instructions] Scott. Yes, Janney your proceed today from with sir. question of is question. [Operator first Reiss Our Brett Please Montgomery

hi, you Can Manny, Hi, hear Jim. me?

Very well.

So question. it Good not afternoon. meeting without a asking be Brett, you would a

go, can to of your do down, you some that you talent just people brainstorm recover? get wait sit the if have sets, you just sales has, kind can kind good you find to engineering see, with and you, of passively the afternoon. that without to you wondering, to sell back aerospace with for There do you have sit I'm having company skill products your

and technology roadmapping, and see glimpse we process, new let thoughtful some process. our strategic our working is during philosophy. July of roadmapping cuts of say the those company give do was months a meeting that on, four on presently name which to side to the question, supply aerospace, forward. taken, to and an those extent, going across actually audience because won't ring. This what the spent focus a for shareholder planning. our would it answer part in product the searching, not discuss are we've we've of the a planning Many elements we But can you give outcome I but satisfaction the the our but both not of that precipitous wait planning to of strategic the we’ve not actions opportunity our board in cost last our at and customer in that's phone if completed we’ll response planning We week, I the a Brett, Okay, leading me

have we within amount yes, communication today. their a move hands So to organization the the tremendous boat has of Everybody on an oar forward.

headcount, year, at What quarter? first now right. employee is the of this end what Right, the the the end and was it of at

of Yes, take, the right employees in maybe XXX the at think about around year, three, it or three net that. what we’re give end was down I

order able amount business if you really back if and business, Right, back? with right the employees, mix the hopefully you'll and think be snaps of flow manage to comes

our CVD challenge, manufacturing us. be I that be that -- If say very as do be variable the quite applying more We back ourselves bit is it's on focus chain. variable Proper. have outside of how of That mean, on focus would we supply the but a talent the for you of for position would elastic. in the I leveraging a primarily the technical the expense and engineering and snaps business area staff, would labor and we're say There the

has mean, into I that improved, more a when And somewhat. order Right. bit what it can you specificity you little went go of But say into means? activity you

QX QX. approximately average we QX I'm QX, in here, math, very COVID. numbers the can can't XX%, over do, insight I XXXX orders obviously at not due in looking quick about you some to were something do QX, were But XX% on give that's but to higher an that weak I XX% typically we the the

in we’re seeing our recovery, statements. of cautious, and some level we’re cautious So we're comments and

to equipment We’re light and is increased spare the the activity seeing demand indication starting That's in parts again. increase. quotations that for an rate up aerospace also order

time, of many sites turned production off. were period sites our that or During of

market back opportunity and the is with the there, one products. materialized coatings a area for one, Right, is an of nothing seems opportunity in great why there last us? for And queue. to that have say was that and drop past, would I'll medical In company that

The a sockets, are is industry, area that medical it’s deposition, That's for not implants, building manufacturing is that prosthetics, There There product up very people other specifically techniques for additive specialized for secondary ball for XD titanium. are an but components. tantalum whether line. these which there's our tantalum area. us, to competitors provide

as trying Some sizeable event. say that it’s not to sell not, Eisenhower, tantalum of is it deposition us near-term is it's growth material on area. a today the systems I and one it’s my a of and three the roadmap We’ll are those not the very that turn that for large strategic to it's you but a medical, top now. other entrenched continue deposition to a tugboat small applications feat, technologies cannot right to

were buyer looks would extension? if building the of or you a And bet a May man, the betting XX, you XX-day Right. closes for

Well, Long and close. every They’re will Island will Company that strong, we're close. not but reputable it we better indication have

I shareholders we was the better, thought But we Brett, not not accurate comment into venture is with is we deal. a other indication our people's that And think which that clearly not I definitely we would there Tom's money, would money. don't quite an that frankly close. bet and if

and close in have no next So indication we won't there months. it is the confidence, few that

ask you as do. to right. All for to going Thank you I'm always drop back. Right, right. allowing questions me

Thank you, sir.

is Investor. with [Morton question your question. a proceed Please next Private Our Instructions] Howard], [Operator from

hope. lot question my a Yes, is, there's of

to you a it's that of checking has will it next they or I Labs, it's Why Brook Stony Do not, happened mean, some whether decide or nothing, out. they're the viable So presumably thing product that have not in type health so? quarter said product, report. working the nothing

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technology We sources. through external have some funding sources, continued to through work research looking we’re and on the other for

take had a we a term in again, we're us a in a of we’re have a may I and probably two. give what not quarter now of But technology, business. year this next substantial do in or So don't would that And element product or be our a terminology, from that quarter development the that any review what is gate setback. misconceptions to you we want will a

you. Thank

Thank you, sir.

Why one more don’t it you and…? poll give

no [Operator no Instructions] be at questions, further time. this There appears questions to

if Brock, on adjourn questions. July Okay, company you look We'd everybody no plans today's Annual we there our and Meeting. more are some speaking to additional giving to meeting insight in and to like our our Shareholders XX forward

conference. today's concludes This

You your you lines may for this at disconnect Thank your time. participation.