Q1 2025 CVD Equipment Corp Earnings Call
It will be Emmanuel walk us president and CEO and member of the C V D Board of directors.
And Richard Kawano, 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 Ww CVD equipment Dot com before.
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 and general business conditions and outlook. These forward looking statements are based on certain assumptions expectations.
<unk> and projections that are subject to a number of risks and uncertainties described in our press release and in our filings with the SEC, including but not limited to the risk factors section of the company's 10-K for the year ended December 31 2024.
Actual results may differ materially from those described during this call. In addition, Oh all forward looking statements are made as of today and we undertake no obligation to update any forward looking statements based on new circumstances or revised expectations.
Now I would like to turn the call over to Emmanuel <unk>.
Speaker Change: Operator, thank you and good afternoon, everyone.
Speaker Change: Thank you all for joining us today to discuss our first quarter 2025 financial results, an author important company developments and pertinent information related to our business.
Speaker Change: Our thoughts are important to us and we look forward to your questions in our Q&A session.
Speaker Change: First quarter 2025 revenue was $8 3 million up 60.
Speaker Change: 69% versus the prior year quarter, and $12, 2% higher than the fourth quarter of 2020 for.
Speaker Change: Revenue for from our CVD equipment segment was driven by revenue recognized principally by two contracts one in the industrial markets are one and the aerospace.
Speaker Change: Our SBC segment continued to see strong demand for its gas delivery equipment.
Speaker Change: The increased revenue and lower than expected orders in the quarter of $2 8 million our backlog declined during the quarter from $19 4 million.
At the end of December 2024 to $13 8 million March 31 2025.
Speaker Change: Subsequent to the quarter end, we did receive a $1 $2 million semiconductor system order.
Speaker Change: Our CVD equipment segment.
Speaker Change: During the quarter, we implemented a plan to reduce our operating cost to be consistent with current customer demand and improve our operating performance. We continue to evaluate the demand for our products and opportunities to reduce our operating costs.
Speaker Change: Our net income for the quarter was 360000.
While the first quarter of 2025 represented the third consecutive quarter of net income.
Speaker Change: Due to the nature of our business, we expect that our order and revenue levels will continue to fluctuate given the markets that we serve.
In addition.
The recent imposition of tariffs has presented us with a new challenge and uncertainty of such tariffs may affect our cost of components and materials as well as contribute to economic uncertainty, which may potentially affect our order rate.
We are evaluating the tariff environment and planning accordingly.
Speaker Change: We believe we are well positioned for the future and we are remain focused on identifying opportunities in our key targeted markets of aerospace and defense high power electronics, and EV battery energy storage.
Speaker Change: We are staying the course of our strategic efforts to maintain and grow our order rates, while carefully managing our expenses to achieve our goal of long term profitability and positive cash flow, while simultaneously focusing on growth and return on investment.
Richard <unk>: With that I would like to turn the call over to our CFO, Richard <unk>, who will provide an overview of our first quarter results.
Richard <unk>: Thank you Manny and good afternoon, as Manny mentioned, our revenue for the first quarter of 2025 was $8 3 million $3 4 million or 69% higher than the fourth the first quarter I should say of 2020 for.
Richard <unk>: This increase in revenue was primarily attributable to our CVD equipment segment gross profit for the first quarter was $2 7 million with a gross profit percentage of 32, 4%. This compares to a gross profit of <unk> 8 million or a gross profit percent of 16, 2% for the first.
Richard <unk>: Order of 'twenty 'twenty four the.
Richard <unk>: The increase in gross profit of $1 9 million and also the increase in our gross profit margin percent was primarily the result of higher overall revenues improved absorption of overhead as well as improved margins on contracts in progress as compared to the contracts and progress in the prior year quarter.
Richard <unk>: Our operating income for the first quarter was 269000 as compared to an operating loss of $1 6 million in the first quarter of 2024. This improvement in operating income was primarily due to the increase in gross profit margin as operating expenses were consistent with the prior year quarter.
Richard <unk>: After other income consisting principally of interest income our net income for the first quarter was $360000 or <unk> <unk> per share for both basic and.
Unknown Executive: In addition, the recent imposition of tariffs has presented us with a new challenge. An uncertainty as such tariffs may affect our cost of components and materials, as well as contribute to economic uncertainty, which may potentially affect our order rates.
In addition, the recent imposition of tariffs has presented us with a new challenge and uncertainty of such tariffs may affect our cost of components and materials as well as contribute to economic uncertainty, which may potentially affect our order rate.
Richard <unk>: Diluted this compares to a net loss for the first quarter of 2024, $1 5 million or <unk> 22 per share for basic and diluted now turning to our balance sheet. Our working capital at March 31, 2025 was $14 5 million. This compares to $13 $8 million in the prior year end.
Unknown Executive: We're evaluating the tariff environment and planning a court.
We're evaluating the tariff environment and planning accordingly.
Unknown Executive: We believe we are well positioned for the future and we are remaining focused on our identifying opportunities in our key targeted markets of aerospace and defense, high power electronics and EV battery energy storage.
We believe we are well positioned for the future and we are remaining focused on our identifying opportunities in our key targeted markets of aerospace and defense high power electronics, and EV battery energy storage.
Our cash and cash equivalents balance was $10 2 million as of March 31, as compared to $12 6 million at December 31, 2024. This decrease in cash and cash equivalents was principally due to cost incurred on contracts in progress that resulted in an increase of $3 million in <unk>.
Unknown Executive: We are staying the course of our strategic efforts to maintain and grow our order rate while carefully managing our expenses to achieve our goal of long-term profitability and positive cash flow while simultaneously focusing on growth and return on investment.
We are staying the course of our strategic efforts to maintain and grow our order rate while carefully managing our expenses to achieve our goal of long term profitability and positive cash flow, while simultaneously focusing on growth and return on investment.
Richard <unk>: <unk> assets and a decrease of $1 $3 million in contract liabilities.
Richard <unk>: This was offset by our net income and our noncash expense charges.
Richard Catalano: With that, I would like to turn the call over to our CFO, Richard Catalano, who will provide an overview of our first quarter results. Thank you, Manny, and good afternoon. As Manny mentioned, our revenue for the first quarter of 2025 was $8.3 million, $3.4 million, or 69% higher than the first quarter, I should say, of 2024. This increase in revenue was primarily attributable to our CBD equipment segment. Gross profit for the first quarter was $2.7 million, with a gross profit percentage of 32.4%. This compares to a gross profit of $0.8 million, or a gross profit percent of 16.2% for the first quarter of 2024.
With that I would like to turn the call over to our CFO, Richard <unk>, who will provide an overview of our first quarter results.
Richard <unk>: We are unable to predict the impact of the current economic and geopolitical uncertainties, including tariffs that will have on our financial position and future results of operations and cash flows.
Richard: Thank you Manny and good afternoon, as Manny mentioned, our revenue for the first quarter of 2025 was $8 3 million $3 4 million or 69% higher than the fourth the first quarter I should say of 2020 for.
Richard <unk>: Our return to consistent profitability is dependent among other things the receipt of new equipment orders and our ability to mitigate the impact of inflationary pressures as well as managing our operating expenses and capital expenditures.
Richard: This increase in revenue was primarily attributable to our CVD equipment segment gross profit for the first quarter was $2 7 million with a gross profit percentage of 32, 4%. This compares to a gross profit of <unk> 8 million or a gross profit percent of 16, 2% for the first.
In addition, our revenue in the quarters have historically fluctuated based on changes in order rates as well as other factors in our manufacturing process process, which may impact the timing of our revenue recognition. Accordingly orders received from customers and revenue recognized may fluctuate from quarter to quarter.
Richard: Order of 'twenty 'twenty four the.
Richard Catalano: The increase in gross profit of $1.9 million, and also the increase in our gross profit margin percent, was primarily the result of higher overall revenues, improved absorption of overhead, as well as improved margins on Contracts in Progress as compared to the Contracts in Progress in the prior year quarter. Our operating income for the first quarter was $269,000 as compared to an operating loss of $1.6 million in the first quarter of 2024. This improvement in operating income was primarily due to the increase in gross profit margin as operating expenses were consistent with the prior year quarter.
Richard: The increase in gross profit of 1.9 million and also the increase in our gross profit margin percent was primarily the result of higher overall revenues improved absorption of overhead as well as improved margins on contracts in progress as compared to the contracts and progress in the prior year quarter.
Richard <unk>: After <unk>.
Richard <unk>: Considering all these factors, we believe our cash and cash equivalents and our projected cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for the next 12 months, we will continue to evaluate the demand for our products assessing our operations and take actions anticipated to maintain our opera.
Richard: Our operating income for the first quarter was 269000 as compared to an operating loss of $1 6 million in the first quarter of 2024. This improvement in operating income was primarily due to the increase in gross profit margin as operating expenses were consistent with the prior year quarter.
Richard <unk>: Getting cash to support our working capital needs.
Manny: I'll now turn it over to back to Manny.
Rich: Rich thanks for the presentation.
Manny: Our focus continues.
Manny: To remain on our customers' markets, our employees and our shareholders of course, and the pursuit of growth and return to consistent profitability. We look forward to continuing to build on our success in the year ahead of us.
Richard Catalano: After other income consisting principally of interest income, our net income for the This compares to a net loss for the first quarter of 2024 of $1.5 million or $0.22 per share for basic and diluted. Now turning to our balance sheet, our working capital at March 31, 2025 was $14.5 million. This compares to $13.8 million at the prior year end. Our cash-in-cash equivalence balance was $10.2 million as of March 31st as compared to $12.6 million at December 31st, 2024. This decrease in cash-in-cash equivalence was principally due to costs incurred on contracts in progress that resulted in an increase of $3 million in contract assets and a decrease of $1.3 million in contract liabilities.
Richard: After other income consisting principally of interest income our net income for the first quarter was $360000 or five cents per share for both basic and diluted this compares to a net loss for the first quarter of 'twenty 'twenty, four and $1 5 million or 22 cents per share for basic and diluted.
Manny: <unk> are important to us and questions.
Manny: With the close of the presentation I would like to open the floor up to your questions.
Richard: Now turning to our balance sheet, our working capital at March 31, 2025 was $14 5 million. This compares to $13 8 million at prior year end, our cash and cash equivalents balance was $10 2 million as of March 31, as compared to $12 6 million at December 31 2024.
Manny: Thank you.
Manny: We will now be conducting a question and answer session.
Manny: I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Manny: You May press Star two if you would like to remove your question from the queue.
Richard: This decrease in cash and cash equivalents was principally due to cost incurred on contracts in progress that resulted in an increase of $3 million in contract assets and a decrease of $1.3 million in contract liabilities.
Manny: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Manny: One moment, please while we poll for questions.
Richard Catalano: This was offset by our net income and our non-cash expense charges.
Richard: This was offset by our net income and our noncash expense charges.
Unknown Executive: We are unable to predict the impact of the current economic and geopolitical uncertainties, including tariffs, that will have on our financial position and future results of operations and cash flows. Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter. After considering all these factors, we believe our cash and cash equivalents and our projected cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for the next 12 months. We will continue to evaluate the demand for our products, assess our operations, and take actions anticipated to maintain our operating cash to support our working capital needs.
Richard: We are unable to predict the impact of the current economic and geopolitical uncertainties, including tariffs that will have on our financial position and future results of operations and cash flows are.
Manny: As a reminder, it is star one task of question.
Manny: Okay.
Richard: Our return to consistent profitability is dependent among other things the receipt of new equipment orders and our ability to mitigate the impact of inflationary pressures as well as managing our operating expenses and capital expenditures. In addition, our revenue and orders have historically fluctuated based on changes in order rates as well.
Manny: Alright, I'm not seeing any questions I'd like to turn the floor back over to amount Emmanuel <unk> for any closing remarks. Thank you operator, and thank you everyone for dialing in today, we appreciate.
Manny: The attendance on the call and your support and loyalty of our shareholders and our employees.
Richard: There's other factors in our manufacturing process process, which may impact the timing of our revenue recognition accordingly orders received from customers and revenue recognized may fluctuate from quarter to quarter.
Speaker Change: You have any further questions. Please feel free to reach out to Richard or myself directly. This concludes our call.
After considering all these factors, we believe our cash and cash equivalents and our projected cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for the next 12 months, we will continue to evaluate the demand for our products assessing our operations and take actions anticipated.
Speaker Change: You may disconnect your lines at this time, thank you for your participation.
Richard: Maintain our operating cash to support our working capital needs.
Unknown Executive: I'll now turn it over back to Matt. Rich, thank you for your presentation. Our focus continues. to remain on our customers, markets, our employees, and our shareholders, of course. of growth and return to consistent profitability.
Vaccinating rich: Now I'll turn it over to Vaccinating rich.
Speaker Change: Sure.
Speaker Change: Rich thanks for the presentation.
Speaker Change: Our focus continues.
Speaker Change: To remain out of our customers' markets, our employees and our shareholders of course, and the pursuit of growth and return to consistent profitability. We look forward to continuing to build on our success in the year ahead of us.
Unknown Executive: We look forward to continuing to build on our success in the year ahead of us.
Unknown Executive: Your comments are important to us and with questions.
Speaker Change: Comments are important to us and questions with the close of the presentation I would like to open the floor up to your questions.
Unknown Executive: With the close of the presentation, I'd like to open the floor up to those who have Thank you.
Speaker Change: With regard.
Speaker Change: Thank you we will now be conducting a question and answer session.
Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we pull for questions. As a reminder, it is star one, task of question.
Speaker Change: You would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: Yes.
Speaker Change: With respect.
Speaker Change: You May press Star two if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: As a reminder, it is star one task of question.
Speaker Change: Okay.
Speaker Change: Okay.
Unknown Executive: All right, I'm not seeing any questions.
Emmanuel: Alright, I'm not seeing any questions I'd like to turn the floor back over to him out Emmanuel blackouts for any closing remarks.
Emmanuel Lakios: I'd like to turn the floor back over to Emmanuel Lakios for any closing remarks. Thank you, operator. And thank you everyone for dialing in today. We appreciate the attendance on the call and your support and loyalty of our shareholders and our employees. If you have any further questions, please feel free to reach out to Richard or myself directly.
Emmanuel: Thank you operator, and thank you everyone for dialing in today.
Emmanuel: Appreciate the attendance on the call and your support and loyalty of our shareholders and our employees. If you have any further questions. Please feel free to reach out to Richard or myself directly. This concludes our call.
Unknown Executive: This concludes our presentation. You may disconnect your lines at this time. Thank you for your participation.
Emmanuel: You may disconnect your lines at this time, thank you for your participation.
Emmanuel: [music].