CVD Revenue Rose 20.1% to Record-breaking Levels

CENTRAL ISLIP, N.Y., (Business Wire) – November 16, 2015 – CVD Equipment Corporation (NASDAQ: CVV) announced that it has achieved record-breaking revenue for both the three and nine month periods ended September 30, 2015.

CVD’s revenue rose 20.1% to a record-breaking level of $10.6 million for the current quarter ending September 30, 2015 compared to $8.9 million in revenue for the quarter ended September 30, 2014. For the current nine month period, CVD’s revenue rose 59.0% to a record-breaking $30.8 million compared to $19.4 million in revenue for the nine month period ended September 30, 2014.  CVD also reported net earnings of $0.8 million or $0.13 per basic and diluted share and $2.8 million or $0.46 per share basic and $0.45 per share diluted for those respective periods compared to earnings of $0.9 million or $0.14 per share basic and diluted and $0.8 million or $0.13 per share basic and diluted for the three and nine months ended September 30, 2014.

The Company incurred legal fees and settlement costs of $1.2 million during the quarter ended September 30, 2015 and $1.6 million during the nine months ended September 30, 2015 related to the settlement of an outstanding claim. Without this non-recurring charge, CVD would have achieved net income of $2.0 million or $0.32 per diluted share for the three months ended September 30, 2015 and $4.4 million or $0.69 per diluted share for the nine months ended September 30, 2015

New orders for the quarter were $2.9 million, as a result, the Company’s backlog decreased to $11.5 million at September 30, 2015, a decrease of 5.0% compared to the $12.1 million backlog at September 30, 2014. The Company received $21.2 million in new orders during the nine months ended September 30, 2015 compared to $27.5 million in new orders received during the nine months ended September 30, 2014, a decrease of 22.9%. The timing of the receipt of an order is subject to various factors, most of which are not under our control. As a result, our order levels from period to period, tend to be uneven. Order levels attained in one period are not necessarily indicative of order levels that will be attained in future periods. Although timing for completion of backlog varies depending on the product mix and can be longer.

The Company continues to maintain a strong cash position and a healthy working capital ratio.

Leonard Rosenbaum, President and Chief Executive Officer stated:  “A significant portion of our orders this year came from existing customers who rely on CVD to further expand their production capacity with both repeat and new innovative equipment. We continue to manufacture, deliver and start-up these large orders, especially orders for the initial systems with new technology that our customers need to execute on their significant production plans.  We expect to continue to be a key supplier in that expansion strategy over the coming years.

“As new technologies develop we use our talents to design and manufacture the state of the art process equipment that is needed to prove these concepts. We work with our customers from the research state, to launching the process in production and in the capacity ramp to full production.  In doing this, we have made significant advances in custom chemical deposition equipment for medical, aerospace, nanomaterials and other applications. As we work with our customers in research and equipment development we continue building the technology base that fuels our growth.”

CVD Equipment Corporation and Subsidiaries
Selected Other Data (Unaudited)
For the Three and Nine Months Ended September 30, 2015
(in thousands except per share information)

Reconciliation of GAAP to Non-GAAP Financial Data
(in thousands, except per share data)
(Unaudited)

Three Months Ended September 30 Nine Months Ended September 30
2015 2014 2015 2014
Revenue, as reported $ 10,646 8,867 $ 30,772 19,360
Gross profit, as reported 4,125 3,309 12,042 7,328
Operating expenses, as reported 3,255 2,097 8,448 6,007
Adjustments
Nonrecurring loss and legal fees on litigation settlement 1,160 1,550
Non-GAAP operating expenses 2,095 2,097 6,898 6,007
Non-GAAP operating income 2,030 1,212 5,144 1,321
Net income as reported 811 858 2,814 792
Adjustments, net of tax
Nonrecurring loss and legal fees on litigation settlement 1,160 1,550
Non-GAAP income, net of tax 1,971 858 4,364 792
Diluted earnings per share, as reported $0.13 $0.14 $0.45 $0.13
Add back:
Per share impact of Non-GAAP adjustment, net of tax 0.19 0.24
Non-GAAP per share earnings 0.32 0.14 0.69 0.13

CVD Equipment Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)

September 30, 2015 December 31, 2014
Assets
Current assets:
     Cash and cash equivalents $13,269 $11,967
     Accounts Receivable, net 5,054 6,463
     Costs and estimated earnings in excess of
     billings on contracts in progress 2,512 2,499
     Inventories 3,647 4,842
     Restricted cash 200 200
     Deferred Taxes 2,099 2,888
     Other current assets 104 195
        Total current assets 26,885 29,053
Property, plant and equipment, net 14,975 15,415
Deferred taxes 1,360 750
Restricted cash --- 200
Other assets 95 83
Intangible assets 60 56
        Total assets $43,375 $45,557
Liabilities and stockholders' equity
Current liabilities:
     Accounts payable $1,838 $1,683
     Accrued expenses and other current liabilities 3,883 3,297
     Current portion of long-term debt 685 720
     Billings in excess of costs and estimated
     earnings on contracts in progress 753 1,328
     Deferred revenue 235 489
     Accrued litigation settlement --- 4,925
        Total current liabilities 7,394 12,442
Long-term debt 3,341 3,846
        Total liabilities 10,735 16,288
Total stockholders' equity 32,640 29,269
 
Total liabilities and stockholders' equity $43,375 $45,557

Earnings release should be read in conjunction with Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2014

About CVD Equipment Corporation
CVD Equipment Corporation (NASDAQ: CVV) 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 our 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 our application laboratory, we provide process development support and process startup assistance with the focus on enabling tomorrow’s technologies™.

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 requirements.

For further information about CVD Equipment Corporation please contact Karen Hamberg Phone: (631) 981-7081, Fax: (631) 981-7095 or Email: investorrelations@cvdequipment.com or sales@cvdequipment.com