CVD Equipment Corporation

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I welcome to CDB Equipment Corporation's second quarter 2024 earnings call. 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 Rakios, President and CEO and member of the CVB Board of Directors, and Richard Catalano, 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 www.cvbequipment.com. Before I begin, I would like to remind you that many of the comments made on today's call contain favorably statements, including those related to future financial performance, market growth, total available market, demands for our products and general business conditions, and outlook. These forward-looking statements are based on certain assumptions, expectations, and projections that are subject to a number of risks and uncertainties described in our press release and in our followings with the SEC, including the monument to the risk factors section of the company's 10K for the year ended December 31, 2023. Actual results may differ materially from those described during this call. In addition, all forward-looking statements are made as of today, and we undertake no obligation to update any forward-looking statements based on the new circumstances or revised expectations. Now, I'd like to turn the call over to Emmanuel Rojas. Please go ahead.

Joe, thank you, and good evening, everyone. Thank you for joining us today to discuss our second quarter 2024 financial results and other important company developments and pertinent information related to our business. We look forward to your questions in our Q&A session. quarter 2024 revenue was 6.3 million representing a 25.2% increase from the prior year period and was up 28.9% as compared to our first quarter of 2024. While our year-to-date revenue was 11.3 million which is 18.1% lower than the prior year period. We are pleased to have received PVT-200 system, which was part of the first quarter strategic order for silicon carbide 200 millimeter crystal bull growth. The performance of the system will be evaluated for production by our now second account.

We are encouraged that our backlog of $24 million at the end of June 30, 2024 is meaningfully higher than our year-end backlog of $18 million. million by demand segment for our gas equipment.

Orders for the first four were $9.8 million for the first six months of 2023. During the first quarter, we received a $10 million multi-system order in our industrial market from a company coding components with Silicon Carbide. Overall, we are disappointed with CBD's operating performance after the year as order and revenue levels continue to fluctuate the emerging growth and markets we serve and the adverse financial impact of the specific first article system that shipped in the second quarter.

We'll stay with profitability

and cash flow while simultaneously focusing on growth and return on investment. I would like to turn the call over to our which can provide an overview of our second quarter results.

Thank you, Manny, and good afternoon. As Manny mentioned, our revenue for the second quarter of 2024 was $6.3 million as compared to $5.1 million for the second quarter of 2023. This represents an increase of $1.3 million or $25 million. The increase in revenue versus the prior year quarter was primarily attributable to higher revenue of $1 million from our CBD equipment segment, a $0.5 million increase in revenue from our SDC segment, offset by a $0.3 decrease from our CBD material segment due to the disposition of Tantaline in May of 2023 and the exit of our Mesoscar business. The increase in CVD equipment was principally due to increases in revenue from aerospace contracts, offset in part by lower revenues for PDT-150 systems and spare parts. Our SDC segment revenues were 29% higher for the second quarter of 2023, and were .4 million, or 20% higher than the first quarter of 2024, as demand for SDC's gas delivery system remains strong. Gross profit for the three months ended June 30, 2024 was $1.6 million with a gross profit of $1.4 million as compared to a gross profit of $1.4 million or gross profit margin of 27.4% for the three months ended June 30, 2023. This increase in gross profit of $0.2 million was primarily due to higher revenues that was offset by a contract mix with lower gross margins as compared of 2024 was $0.9 million as compared to an operating loss of $1.2 million in the second quarter of 2023. The operating loss in the prior year second quarter both included a non-recurring charge of $0.3 million related to the sale of the Tampa Line subsidiary and also an impairment charge resulting from our decision. This compares to a net loss for the second quarter of 2023 of $1.1 million and a net loss for the second quarter of 2023 of $1.1 million. for both basic and diluted. Our cash and cash equivalents at June 30th, 2024 was $10 million, as compared to $14 million at the end of December, principally due to the net loss of $2.8 million of non-cash expense items of $0.8 million. Our working capital at June 30, 2024 was $12.7 million, and this compares to $14.3 million at December 31, 2023. All the charge profitability is dependent upon, among other things, the receipt of new equipment orders, our ability to mitigate the impact of inflationary pressures, as well as managing planned capital expenditures and operating expenses. In addition, our revenues and orders have historically fluctuated based on changes in order rate, as well as other factors in our manufacturing process that impact the timing of our revenue recognition. 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. I'll now turn it back to Manny.

your presentation. Our focus remains on our customer markets, our employees, our shareholders, and the pursuit of growth and return to consistent profitability. We look forward to continuing to build on our success in the year ahead. Your comments and questions are important to us. With the close of our presentation, I would like to open the floor to your questions.

Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and the confirmation sign will indicate your line is in the question queue. You may press star 2 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 keys. One moment, please, I'll report the questions. Ladies and gentlemen, there are no further questions at this time. I will turn the call back to Manuel Rojas for closing remarks.

Thank you, Operator, and thank you, everyone, for dialing in today. We appreciate the attendance on the call and the support and, of course, the loyalty from our shareholders and employees alike. If you have any further questions, please reach out to me directly. This concludes our second quarter call.

Thank you.

This concludes today's conference. You may now disconnect your lines. Thank you for your participation.