CVD Equipment Q2 2024 Earnings Report

Greetings, and thank you for standing by. And welcome to CVV 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 Lachios, President and CEO and member of the CVD 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.cdbequipment.com. Before I 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, 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 filings with the SEC, including but not limited to the Risk Factors section of the company's 10 ks 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 would like to turn the call over to Emmanuel Lachios. Please go ahead.

Thank you, Manny, and good afternoon. As Manny mentioned, our revenue for the Q2 of 2024 was $6,300,000 as compared to $5,100,000 for the Q2 of 2023. This represents an increase of $1,300,000 or 25 0.2 percent. The increase in revenue versus the prior year quarter was primarily attributable to higher revenue of $1,000,000 from our CBD Equipment segment, a $500,000 increase in revenue from our SDC segment, offset by a 0.3% decrease from our CVD Materials segment due to the disposition of Tantaline in May of 2023 and the exit of our MesoScribe business. The increase in CVD equipment was principally due to increases in revenue from aerospace contracts, offset part by lower revenues for PBT-one hundred and fifty systems and spare parts.

Our SDC segment revenues were 29% higher for the Q2 of 2023 and were $400,000 or 20% higher than the Q1 of 2024 as demand for SDC's gas delivery system remains strong. Gross profit for the 3 months ended June 30, 2024 was 1,600,000 with a gross profit margin of 25.4 percent as compared to a gross profit of 1,400,000 or gross profit margin of 27.4 percent for the 3 months ended June 30, 2023. This increase in gross profit of $200,000 was primarily due to higher revenues that was offset by a contract mix with lower gross margins as compared to the prior year quarter. Our operating loss for the Q2 of 2024 was $900,000 as compared to an operating loss of $1,200,000 in the Q2 of 2023. The operating loss in the prior year second quarter both included a non recurring charge of $300,000 related to the sale of the Tantalang subsidiary and also a impairment charge resulting from our decision to exit our MesoScribe business.

So that's total charge one time charges last year of $300,000 After other income consisting principally of interest income, our net loss for the 2nd quarter was 7 $61,000 or $0.11 per share for both basic and diluted. This compares to a net loss for the Q2 of 2023 of 1,100,000 or dollars or of $3,000,000 offset by an increase in accounts payable and we also have non cash expense items of 800,000. Our working capital at June 30, 2024 was 12,700,000 and this compares to 14,300,000 at December 31, 2023. Our return to 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 impacts 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.

Ladies and gentlemen, there are no further questions at this time. I'd like to turn the call back to Manuel Akhios for closing remarks.

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