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CVD Reports Third Quarter 2018 Results

CENTRAL ISLIP, N.Y.–(BUSINESS WIRE)–$cvv #cvdequipment–CVD Equipment Corporation (NASDAQ: CVV),
a leading provider of chemical vapor deposition systems, today announced
its third quarter 2018 financial results.

“As highlighted in our pre-announcement, the third quarter saw a
confluence of events that drove lower-than-anticipated results. These
included delays in orders from a number of customers and an
exceptionally long permitting process for the build-out of our new CVD
Materials production facility,” said Leonard A. Rosenbaum, President and
Chief Executive Officer. “From our current vantage point, these
conditions may continue to weigh on revenue and earnings over the next
two quarters.

“Despite these setbacks, knowledge of our markets and conversations with
current and potential customers continue to make us optimistic about our
overall business and the materials segment’s potential to contribute to
our long-term success in high-growth areas such as biomedical materials,
aerospace, and corrosion resistant applications. Our new Central Islip
facility will be the backbone of our materials future, where our R&D
investments are beginning to bear fruit. Recently we filed key
provisional patents for corrosion resistant coatings and a family of
novel Fluid Reactors that allows the efficient transfer of gases into
and out of liquids. One potential application is for use in oxygenation
cartridges used during cardio pulmonary bypass surgery.”

Revenue for the third quarter was $4.0 million, compared to $6.4 million
in the prior quarter and $10.8 million from the same period last year.
Net loss for the third quarter was $2.5 million compared to a net loss
of $1.3 million in the prior quarter and income of $1.4 million a year
ago. This loss is primarily a result of costs associated with
maintaining a production staff in anticipation of receiving additional
equipment orders (which to date have not materialized), existing
contract adjustments, and the ongoing costs related to the CVD Materials
business. Net loss per share was $0.39 compared to a net loss of $0.21
in the second quarter of 2018 and income of $0.22 a year ago. Backlog as
of September 30, 2018 was $6.5 million compared to $6.4 million on June
30, 2018. In light of our results for this quarter Management and the
Board will continue to evaluate the Company's business strategy,
including cost structure, needed capital, and capital infrastructure

The timing of the CVD’s return to profitability will depend upon, among
other things, the receipt of new orders, obtaining the necessary
building permits for the new CVD Materials facility, and the ramp up of
the materials business following the completion of this facility, which
is expected late in the second quarter of 2019. The Company has retained
a new architect and has met local government officials, with the aim of
expediting the permitting process, in order for construction of the
facility to proceed and be completed as soon as practicable.

The Company will hold a conference call to discuss its results today at
4:30 pm (Eastern Time). To participate in the live conference call,
please dial toll free (877) 407-0784 or International (201) 689-8560. A
telephone replay will be available for 7 days following the call. To
access the replay, dial (844) 512-2921 or (412) 317-6671. The replay
passcode is 13682176. A live and archived webcast of the call is also
available on the Company’s website at: https://www.cvdequipment.com/event/second-quarter-2018-earnings-conference-call/.

About CVD Equipment Corporation

Equipment Corporation
designs, develops, and manufactures a broad range of chemical vapor
deposition, gas control, and other state-of-the-art equipment and
process solutions used to develop and manufacture materials and coatings
for research and industrial applications. This equipment is used by its
customers to research, design, and manufacture these materials or
coatings for aerospace engine components, medical implants,
semiconductors, solar cells, smart glass, carbon nanotubes, nanowires,
LEDs, MEMS, and other applications. Through its application laboratory,
the Company provides process development support and process startup
assistance with the focus on enabling tomorrow’s technologies™.
It’s wholly owned subsidiary CVD Materials Corporation provides advanced
materials and metal surface treatments and coatings to serve demanding
applications in the electronic, biomedical, petroleum, pharmaceutical,
and many other industrial markets.

The Private Securities Litigation Reform Act of 1995 provides a “safe
harbor” for forward-looking statements. Certain information included in
this press release (as well as information included in oral statements
or other written statements made or to be made by CVD Equipment
Corporation) contains statements that are forward-looking. All
statements other than statements of historical fact are hereby
identified as “forward-looking statements, “as such term is defined in
Section 27A of the Securities Exchange Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward looking information involves a number of known and unknown risks
and uncertainties that could cause actual results to differ materially
from those discussed or anticipated by management. Potential risks and
uncertainties include, among other factors, conditions, success of CVD
Equipment Corporation’s growth and sales strategies, the possibility of
customer changes in delivery schedules, cancellation of orders,
potential delays in product shipments, delays in obtaining inventory
parts from suppliers and failure to satisfy customer acceptance

CVD Equipment Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands except per share information)

Three Months Ended September 30 Nine months Ended September 30
2018 2017 2018 2017
Revenue $ 4,028 10,832 $ 19,617 31.312
Gross (loss)/profit (56) 4,603 4,821 13.184
Operating expenses





Operating (loss)/income (2,853) 1,890 (3,323) 5,438
Net (loss)/income (2,503) 1,396 (3,275) 3,677
Net (loss)/income per Diluted earnings per share ($0.39) $0.22 ($0.51) $0.58

CVD Equipment Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

September 30, 2018

December 31, 2017
Current assets:
Cash and cash equivalents $14,192 $14,211
Accounts Receivable, net 2,587 2,059
Contract assets 2,551 8,397
Inventories 2,752 2,966
Other current assets 538 167
Total current assets 22,620 27,800
Property, plant and equipment, net 30,273 28,839
Deferred taxes 1,925 1,609
Other assets 72 68
Intangible assets 520 662
Total assets $55,410 $58,978
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,261 $1,175
Accrued expenses and other current liabilities 1,778 2,738
Current portion of long-term debt 658 647
Current portion acquisition related contingent
payments 100 100
Contract liabilities 229 466
Deferred revenue 891 292
Total current liabilities 4,917 5,418
Long-term debt 12,411 12,906
Total liabilities 17,328 18,324
Total stockholders' equity 38,082 40,654
Total liabilities and stockholders' equity $55,410 $58,978

Earnings release should be read in conjunction with Company’s Annual
Report on Form 10-K for fiscal year ended December 31, 2017


For further information about CVD Equipment Corporation:
Franco, 631-981-7081
Fax : 631-981-7095
[email protected]