CVD EQUIPMENT CORP

Previous wording

We design, develop, and manufacture a broad range of equipment used to develop and produce materials and coatings for the aerospace, compound semiconductor, semiconductor, aerospace, battery energy storage markets as well as advanced industrial applications, and research.

Current wording

We design, develop, and manufacture a broad range of equipment used to develop and produce materials and coatings for the aerospace, compound semiconductor, semiconductor, aerospace, battery energy storage markets as well as advanced industrial applications including nuclear, and research.

Previous wording

We conduct our business through three reportable segments: (i) CVD Equipment that designs and manufactures chemical vapor deposition, physical vapor transport and thermal process equipment; (ii) SDC that designs and manufactures ultra-high purity gas and chemical delivery control systems; and (iii) MesoScribe that provided products related to advanced materials and coatings.

Current wording

We conduct our business through three reportable segments: (i) CVD Equipment that designs and manufactures chemical vapor deposition, physical vapor transport and thermal process equipment; (ii) SDC that designs and manufactures ultra-high purity gas and chemical delivery control systems; and (iii) MesoScribe that provided products related to advanced materials and coatings. The operations of MesoScribe were closed down during 2024.

Previous wording

In February 2024, we received an order from a customer for our PVT200 system used to grow silicon carbide crystals for the manufacture of 200 mm wafers. We shipped this unit to the customer in the third quarter of 2024. PVT150 / PVT200 systems may provide us with standard product offerings to continue to support the EV focused market as well as energy storage, power conversion and power transmission. We plan to evaluate the market conditions and opportunities to expand our product offerings in the power electronics market.

Current wording

In February 2024, we received an order from a customer for our PVT200 system used to grow silicon carbide crystals for the manufacture of 200 mm wafers. We shipped this unit to the customer in the third quarter of 2024. PVT150 / PVT200 systems may provide us with standard product offerings to continue to support the EV focused market as well as energy storage, power conversion and power transmission. In addition, SiC semiconductors specifically help address the need for high energy efficiency and power density in the AC-DC stage in power supply units for AI data centers. We plan to evaluate the market conditions and opportunities to expand our product offerings in the power electronics market.

Previous wording

In February 2024, we received a multisystem order from an industrial customer for approximately $10.0 million that will be used for depositing a silicon carbide protective coating on OEM components and the units are expected to be delivered over 18 to 24 months period.

Current wording

In February 2024, we received a multisystem order from an industrial customer for approximately $10.0 million that will be used for depositing a silicon carbide protective coating on OEM components and the units are expected to be delivered over 18 to 24 months period. In early July 2025, we shipped the first of the CVD4000™ SiC coating reactor systems to our industrial customer.

Previous wording

The following table presents revenue and expense line items reported in our condensed consolidated statements of operations for the quarters ended March 31, 2025 and 2024 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).

Current wording

The following table presents revenue and expense line items reported in our condensed consolidated statements of operations for the three months ended June 30, 2025 and 2024 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).

Previous wording

The increase in revenue versus the prior year period was primarily attributable to higher revenue of $3.4 million from the CVD Equipment segment. Revenue from one industrial customer for the quarter ended March 31, 2025 represented 41.1% of our total revenues and 54.1% of CVD Equipment segment revenues. Revenue from one aerospace customer for the quarter ended March 31, 2025 represented 14.0% of our total revenues and 18.5% of CVD Equipment segment revenues.

Current wording

The decrease in revenue versus the prior year period was primarily attributable to lower revenue of $0.7 million from our CVD Equipment segment and lower revenue of $0.6 million from our SDC segment. Revenue from one industrial customer for the quarter ended June 30, 2025 represented 23.4% of our total revenues and 35.2% of CVD Equipment segment revenues. Revenue from one aerospace customer for the quarter ended June 30, 2025 represented 17.7% of our total revenues and 26.6% of CVD Equipment segment revenues.

Previous wording

The revenue contributed by our SDC segment for the quarter ended March 31, 2025 of $2.0 million (net of intersegment sales of $0.2 million) represented 23.9% of overall revenue as compared to $1.9 million (net of intersegment sales of $15,000) or 38.9% of overall revenue for the year quarter ended March 31, 2024. External revenue for our SDC segment increased by $0.1 million or 3.5% as customer demand for gas delivery system products was consistent with the prior year quarter.

Current wording

The revenue contributed by our SDC segment for the quarter ended June 30, 2025 of $1.7 million (net of intersegment sales of $27,000) represented 33.4% of overall revenue as compared to $2.2 million (net of intersegment sales of $132,000) or 34.4% of overall revenue for the year quarter ended June 30, 2025. SDC segment revenue decreased by $0.6 million or 25.1% due to less contracts in progress during the quarter.

Previous wording

Our order backlog at March 31, 2025 was approximately $13.8 million as compared to December 31, 2024 of $19.4 million. Our order backlog at March 31, 2025 consists of approximately $12.3 million related to remaining performance obligations of contracts in progress and not yet started and the balance of approximately $1.5 million represents other orders received from customers. As of March 31, 2025, one industrial customer represented 32.7% of our backlog and one aerospace customer represented 30.1% of our backlog. Historically, our revenues and orders have fluctuated based on changes in order rate as well as other factors in our manufacturing process that impacts the timing of revenue recognition. Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter.

Current wording

Our order backlog at June 30, 2025 was approximately $13.2 million as compared to $13.8 million at March 31, 2025. Our order backlog at June 30, 2025 consists of approximately $12.0 million related to remaining performance obligations of contracts in progress and not yet started and the balance of approximately $1.2 million represents non-system orders received from customers. As of June 30, 2025, one industrial customer represented 25.6% of our backlog and one aerospace customer represented 25.7% of our backlog. Historically, our revenues and orders have fluctuated based on changes in order rate as well as other factors in our manufacturing process that impacts the timing of revenue recognition. Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter.

Previous wording

For the quarter ended March 31, 2025, research and development expenses were $0.8 million, or 9.4% of revenue as compared to $0.7 million, or 15.2% for the quarter ended March 31, 2024. The increase in 2025 of 4.7% was the result of less amounts charged to cost of revenue during the quarter.

Current wording

For the three months ended June 30, 2025, research and development expenses were $0.7 million, or 13.1% of revenue as compared to $0.7 million, or 10.5% of revenue for the three months ended June 30, 2024, an increase of $21,000 or 3.1%. The increase in 2025 was the result of less hours being charged to cost of revenue for contracts in progress offset by a reduction in personnel.

Previous wording

General engineering support and expenses related to the development of more standardized products and value-added development of existing products are reflected as part of research and development expense. General engineering support and expenses are charged to cost of revenue when work is performed directly on a customer order.

Current wording

General engineering support and expenses related to the development of more standardized products and value-added development of existing products are reflected as part of research and development expense. General engineering support and expenses are charged to costs of goods sold when work is performed directly on a customer order.

Previous wording

Other income, net was $107,000 for the quarter ended March 31, 2025 as compared to other income, net of $151,000 for the quarter ended March 31, 2024. Other income consists principally of interest earned on amounts invested in U.S. treasury securities and was lower than the prior period due to less funds available for investment.

Current wording

Other income (expense) consist principally of interest income on U.S. treasury securities and was lower than the prior year quarter due to less funds available for investment.

Previous wording

We continue to evaluate the potential utilization of our net deferred tax asset, which has been fully reserved for, on a quarterly basis, by reviewing our economic models, including projections of future operating results.

Current wording

We continue to evaluate the potential utilization of our deferred tax asset, which has been fully reserved for, on a quarterly basis, by reviewing our economic models, including projections of future operating results.

Previous wording

Our revenue for the quarter ended March 31, 2025 was $8.3 million compared to $4.9 million for the quarter ended March 31, 2024, an increase of 69.0%.

Current wording

Our revenue for the six months ended June 30, 2025 was $13.4 million compared to $11.3 million for the six months ended June 30, 2024, an increase of $2.2 million or 19.2%.

Previous wording

As of March 31, 2025, aggregate working capital was $14.5 million as compared to aggregate working capital of $13.8 million at December 31, 2024. Cash and cash equivalents at March 31, 2025 and December 31, 2024 were $10.2 million and $12.6 million, respectively.

Current wording

As of June 30, 2025, aggregate working capital was $13.9 million as compared to aggregate working capital of $13.8 million at December 31, 2024. Cash and cash equivalents at June 30, 2025 and December 31, 2024 were $7.0 million and $12.6 million, respectively.

Previous wording

Net cash used in operating activities for the quarter ended March 31, 2025 was $2.3 million. This decrease was principally due to the increase in contract assets of $3.0 million and a decrease in contract liabilities of $1.3 million due to revenue recognized on contracts in progress. These decreases were offset by net income of $0.4 million, non-cash expense items of $0.4 million and a decrease in accounts receivable of $0.7 million.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was $5.4 million. This decrease was principally due to the net loss of $0.7 million, an increase in accounts receivable of $2.8 million, an increase in contract assets of $1.5 million and a decrease in contract liabilities of $1.1 million offset by non-cash items of $0.9 million.

Previous wording

Net cash used in investing activities for the quarter ended March 31, 2025 consisted of capital expenditures of $29,000 related to purchases of property and equipment and investment in a captive insurance company related to our health insurance program of $51,000.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 consisted of capital expenditures of $49,000 related to purchases of property and equipment and investment in a captive insurance company related to our self-insured health benefits program of $51,000.

Previous wording

Net cash used in financing activities for the quarter ended March 31, 2025 consisted of repayments of an equipment loan.

Current wording

Net cash used in financing activities for the six months ended June 30, 2025 consisted of repayments of $43,000 for an equipment loan.

Previous wording

We believe that our cash and cash equivalent positions and our projected cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for the next twelve months from the filing of these condensed consolidated financial statements included in this Form 10-Q. We will continue to assess our operations and take actions anticipated to maintain our operating cash to support the working capital needs.

Current wording

We believe that our cash and cash equivalent positions and our projected cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for the next twelve months from the filing of these financial condensed consolidated financial statements included in this Form 10-Q. We will continue to assess our operations and take actions anticipated to maintain our operating cash to support the working capital needs.

Previous wording

In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Current wording

In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

Long-lived assets consist primarily of property, plant and equipment. Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of the future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if impairment exists pursuant to the requirements of ASC 360-10-35, “Impairment or Disposal of Long-Lived Assets.” If the asset is determined to be impaired, the impairment loss is measured on the excess of it carrying value over its fair value. Assets to be disposed of are reported at the lower of their carrying value or net realizable value. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment.

Current wording

Long-lived assets consist primarily of property, plant and equipment. Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of the future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if impairment exists pursuant to the requirements of ASC 360-10-35, “Impairment or Disposal of Long-Lived Assets.” If the asset is determined to be impaired, the impairment loss is measured on the excess of it carrying value over its fair value. Assets to be disposed of are reported at the lower of their carrying value or net realizable value. Assets to be disposed of are reported at the lower of their carrying value or net realizable value. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment.