CVD Equipment Q1 2026 Earnings Report

CVD Equipment EPS Results

• Actual EPS: N/A
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

CVD Equipment Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

CVD Equipment Announcement Details

• Quarter: Q1 2026
• Date: 5/14/2026
• Time: After Market Closes
• Conference Call Date: Thursday, May 14, 2026
• Conference Call Time: 5:00PM ET

CVD Equipment (NASDAQ:CVV) (NASDAQ: CVV) designs, manufactures and markets custom vacuum deposition systems used to create thin-film coatings and advanced materials for semiconductor, optoelectronic and related industries. Established in 1992 and headquartered in the United States, the company leverages proprietary chemical vapor deposition (CVD), plasma-enhanced CVD, metal-organic CVD (MOCVD), atomic layer deposition (ALD) and physical vapor deposition (PVD) technologies to support both research and production applications.

The company’s product portfolio includes single- and multi-chamber reactors for the deposition of silicon, III-V compounds, metal oxides and other specialty materials, along with fluid-bed reactors for nanoparticle synthesis. These systems address a range of applications such as solar photovoltaics, light-emitting diodes, optical coatings, power electronics and advanced materials research. In addition to turnkey equipment, CVD Equipment provides process development, custom engineering and aftermarket service to help customers optimize performance and throughput.

Serving clients in North America, Europe and Asia, CVD Equipment has established a global sales and service network that delivers installation, training and technical support. Its modular platform approach enables scalable expansion from pilot-scale demonstration units to high-volume production systems. Through ongoing collaboration with academic institutions and industry partners, the company aims to advance thin-film deposition processes and enable emerging technologies in semiconductors and materials science.

CVD Equipment Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: CVD Equipment sold its SDC business to Atlas Copco for about $16.9 million in cash, closing on April 1, 2026 and leaving the company more focused on its core CVD Equipment operations.
• Positive Sentiment: Following the sale, the company said it had roughly $23 million in cash and no long-term debt, which management described as strengthening the balance sheet and improving flexibility.
• Negative Sentiment: First-quarter continuing revenue fell 70.9% year over year to $1.8 million and 30.9% sequentially, driven mainly by lower CVD systems revenue and weak order activity.
• Negative Sentiment: Gross margin compressed sharply to 8% from 27.4% a year ago, and the company posted a $1.7 million net loss from continuing operations as lower sales created higher unabsorbed overhead.
• Neutral Sentiment: Management said bookings are being pressured by geopolitical uncertainty, reduced U.S. university funding, and slower adoption in some end markets, though it is seeing more RFQs in areas like aerospace, defense, industrial applications, and nuclear.

Presentation

[Operator]

Good afternoon, welcome to the CVD Equipment Corporation first quarter 2026 earnings conference call. As a reminder, today's call is being recorded. We'll begin with prepared remarks, followed by a question-and-answer session. Presenting on today's call are Emmanuel Lakios, President and Chief Executive Officer, and Richard Catalano, Executive Vice President and Chief Financial Officer. Our earnings press release and information about today's call replay are available in the investor relations section of our website at cvdequipment.com. Before we begin, please note that the comments made during this call may include forward-looking statements, including statements regarding our future financial performance, market growth, product demand, business outlook, and strategic initiatives. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially.

[Operator]

For a discussion of these risks, please refer to our filings with the Securities and Exchange Commission, including the Risk Factors section of our annual report on Form 10-K for the year ended December 31st, 2025. We undertake no obligation to update any forward-looking statements except as required by law. With that, I will now turn the call over to Emmanuel Lakios, President and Chief Executive Officer.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Thank you, operator, and good afternoon, everyone. We appreciate you joining us today to review our first quarter 2026 financial results and to provide an update on our business and strategic initiatives. Following our prepared remarks, we'll be happy to take your questions. As previously disclosed, in response to continued volatility in our order rates and a recent decline in bookings within our CVD Equipment division, we initiated a transformation strategy late last year designed to specifically reduce fixed operating costs, create a more agile organization, and better position the company to maximize shareholder value. Key elements of this plan included transitioning the CVD Equipment business from a vertically integrated fabrication model to an outsourced fabrication for certain components, which we will expect to reduce fixed costs and improve scalability.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Leading a workforce reduction in CVD Equipment division during the fourth quarter, which is expected to reduce annual operating costs by approximately $1.8 million in 2026. Revising our sales approach by leveraging distributors and external representatives to complement our internal sales organization and broaden market reach. Finally, exploring strategic alternatives for certain business product lines, including potential sale of assets or divestitures. As part of our strategic review, on March 23, 2026, we announced that we had entered into a definitive agreement under which our SDC business was to be sold to Atlas Copco. The purchase price was approximately $16.9 million in cash and is subject to certain purchase price adjustments. The transaction closed on April 1st, 2026. The sale of SDC enables us to concentrate our attention on our core CVD Equipment business.

[Emmanuel Lakios, President and CEO at CVD Equipment]

The divesture has strengthened our balance sheet and provided additional financial flexibility as we continue to evaluate strategic opportunities for the CVD Equipment business, its product lines and our facilities. We continue to drive operational efficiencies, allowing for reduced operating costs and increased flexibility. Our objective remains to maximize shareholder value. Net cash proceeds from the sale of the SDC division received by the company in April 2026 after payment of transaction costs and employee-related liabilities were $14.8 million. Immediately following the sale of SDC, CVD Equipment had approximately $23 million in cash and no long-term debt as we repaid the remaining balance of an equipment loan during the quarter. Under the agreement, an additional $900,000 was placed in escrow for post-closing adjustments and indemnification obligations under the agreement.

[Emmanuel Lakios, President and CEO at CVD Equipment]

We have retained ownership of our Saugerties, New York facility that is being leased to the buyer for an initial term of two years. Turning to our financial results for our continuing CVD Equipment operations, first quarter 2026 revenue was $1.8 million, down 70.9% from the prior year quarter revenue of $6.3 million and down 30.9% sequentially from the fourth quarter of 2026 revenue of $2.7 million. Orders in the first quarter totaled $1.8 million, driven primarily for the demand of spare parts. At March 31, 2026, backlog was $4.7 million, similar to the CVD Equipment backlog at December 31, 2025.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Our bookings for our business continued to be affected by several factors, including geopolitical uncertainty, reduced U.S. government funding for universities, and a slower pace of adoption of our solutions in certain end markets. We are actively monitoring customer demand, the broader geopolitical uncertainties and potential future tariff impacts, and are adjusting our plans accordingly. Even against this backdrop, we remain focused on delivering solutions across our key markets, including aerospace and defense, industrial applications such as silicon carbide on graphite, silicon carbide for high-power electronics, as well as emerging applications, including nuclear energy. With that, I will turn the call over to our CFO, Richard Catalano, to review the financial results in more detail.

[Richard Catalano, EVP and CFO at CVD Equipment]

Thank you, Manny, and good afternoon, everyone. The financial results of SDC are now reflected in our financial statements as discontinued operations for all periods presented, and the SDC assets and liabilities are considered held for sale as of March 31st, 2026. With the sale of the SDC business in 2026, we now have one reportable segment consisting of our CVD Equipment division that manufactures chemical vapor deposition, physical vapor transport, thermal process, and related equipment. I will review first of the results from continuing operations. As Manny said, our first quarter of 2026 revenue was $1.8 million. This compares to $6.3 million in the first quarter of 2026 and $2.7 million in the fourth quarter of 2025.

[Richard Catalano, EVP and CFO at CVD Equipment]

The year-over-year decline as well as the decline from the fourth quarter was primarily driven by lower CVD systems revenue. Our revenue was concentrated among three key customers, which together represented 66% of total first quarter revenue. Gross profit for the quarter was $147,000, resulting in a gross margin of 8%. This compares with gross profit of $1.7 million and a gross margin of 27.4% in the prior year quarter. The decrease in gross profit was primarily the result of lower revenues, which led to higher unabsorbed overhead costs. Gross profit during the quarter ended March 31, 2026, did benefit by about $3.3 million or $317,000 from a contract modification with one of our customers.

[Richard Catalano, EVP and CFO at CVD Equipment]

Our operating loss from continuing operation for the first quarter of 2026 was $1.8 million, compared to $0.3 million in the first quarter of 2025. Included in the first quarter of 2026 was a gain of $46,000 from the sale of equipment. After interest income, net loss from continuing operations for the quarter was $1.7 million or $0.25 per basic and diluted share, compared with a net loss of $229,000 or $0.03 per basic and diluted share in the prior year quarter. Income from discontinued operations before transaction cost of our SDC business division declined from $0.6 million in the prior year quarter to $0.5 million in the current year quarter. This was due to lower gross margins on higher revenues.

[Richard Catalano, EVP and CFO at CVD Equipment]

Transaction costs associated with the sale of SDC consisted of legal and investment banking fees of $0.4 million for the quarter ended March 31st, 2026. Thus, the total income from discontinued operations was $63,000 for the quarter as compared to $0.6 million for the prior year quarter. Again, this is principally due to the transaction costs incurred in connection with the sale of SDC that was consummated on April 1st, 2026. At March 31st, 2026, we have cash and cash equivalents of $8.2 million, and immediately following the sale of SDC, our cash balance was approximately $23 million. The net proceeds from the sale of SDC, totaling $14.8 million, has been invested in short-term Treasury securities. Cash flows for the quarter.

[Richard Catalano, EVP and CFO at CVD Equipment]

Net cash, used in operating activities during the first quarter of 2026 was $0.9 million, principally as a result of a loss from continuing operation. This amount is net of approximately $0.4 million of cash that was contributed by SDC during the first quarter. During the quarter, we did receive $556,000 from the sale of equipment, and we used a portion of those proceeds to pay off an equipment loan in the amount of $181,000. Our working capital improved to $12.8 million at March 31st, 2026, and of course, it increased after we closed the sale of SDC in April. Looking ahead, our return to consistent profitability will depend on improved equipment order flow, disciplined cost management, successful execution of our transformation plan, as well as continued control of capital expenditures. With that, I will now turn it back to Manny.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Thank you, Rich. Our priorities are clear: serving our customers, supporting our employees, creating value for our shareholders, and returning our core CVD equipment business to sustained profitability. Operator, we are now ready to open the line for questions.

[Operator]

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd 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 while we poll for questions. Thank you. Our first question is from Neil Cataldi with Blueprint Capital Management.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Hi, guys. Thanks for taking a couple questions for me. Appreciate it, the time. The first question: With the SDC sale complete, and as you said, $23 million in cash on the balance sheet, can you help us think a little bit about the book value of the Central Islip property? The PP&E on that's like $10.4 million. Is that reflective of what you believe the property is worth in today's market?

[Emmanuel Lakios, President and CEO at CVD Equipment]

I think we can speak to the fact that we a while back had looked at a sale leaseback that the valuation was north of that. You know, we can't talk about the, you know, the write-up or anything of that sort, but, you know, what we can speak about is that we think that that is a conservative number for the valuation. You know, we can't speak to having multiple valuations on the property at this point.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Okay. That number, that was previously in a transaction, would be a fair number for investors to sort of think about?

[Richard Catalano, EVP and CFO at CVD Equipment]

It was just a number of years ago, correct?

[Emmanuel Lakios, President and CEO at CVD Equipment]

Yeah.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Yeah.

[Richard Catalano, EVP and CFO at CVD Equipment]

you know, real estate prices have been.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Yeah.

[Richard Catalano, EVP and CFO at CVD Equipment]

flat around.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Okay. There's dynamics associated during that period of time. That was post-COVID. A lot of demand for high volumetric real estate. You know, the building is still a valued asset of the corporation.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Okay. You know, just trying to establish the substantial amount of value that's here with the company between the $23 million in cash and what that property was previously, you know, transacted for, you know, establishes sort of a floor here of like $7 per share in cash. Very helpful. Thank you. Second question pertains to the language that you're using in the press release. You're citing geopolitical uncertainty, reduced government funding, but yet you're sort of simultaneously adding themes like data center and nuclear to your investor deck and filings as target markets, seeing your R&D not really change.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Most of your, you know, presumably end market customers across the semiconductor wafer space, you know, whether it's 200 millimeter silicon carbide in active production or the 300 millimeter, you know, coming, as well as all the activity in the nuclear space. These are themes that are, you know, have very elevated activity right now. I'm just sort of wondering, like, is any of that translating into active pipeline conversations for either your PVT or your CVI systems?

[Emmanuel Lakios, President and CEO at CVD Equipment]

You know, a couple of things. One is silicon carbide. We've spoken about silicon carbide and the impact on our value proposition in silicon carbide, which is the actual process equipment that makes the boule. You know, clearly, there was a deflation of that market from 2022, 2023 highs. The reasoning for that is really the Chinese vendors really flooding the market with wafers, making it economically unviable for U.S. wafer providers to ramp up and buy additional equipment. That's what deflated the PVT market. We are not primarily a two-dimensional wafer level process equipment company. We are a three-dimensional for the most part.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Most of our orders come from from pre-form CVI, where we are infiltrating a three-dimensional product or by growing a boule, which is a three-dimensional product. We typically are not two-dimensional. You know, a small portion of our business is wafer level, semiconductor wafer level. We are in more the industrial and aerospace element of the food chain. We are seeing RFQs coming in at a higher rate than what we had previously seen last year in 2025. We are seeing that, and it's You know, in general, I think we've seen that money now has freed up after the opening up after the shutdown.

[Emmanuel Lakios, President and CEO at CVD Equipment]

It takes, you know, several months to a few quarters for those, and sometimes several quarters, for those RFQs to turn into orders. We are in the waiting period at this point, and we continue to prosecute RFQs as they come in to process those. As far as, you know, you mentioned whether it's, I think you mentioned AI and nuclear, et cetera. In the area of nuclear, we do see RFQs for CVI, CVD equipment in that space. Again, you know, we're very early in that process. As far as AI, you know, You know, AI is a buzzword. We provide some wafer-level processing, we don't advocate to be an AI, you know, enabling company at this point.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Again, we are I just want to go back and underscore, we are a more three-dimensional product or substrate company than planar wafers.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Okay, thanks. Yeah, that's very helpful. I used the word data center, which was the language that I think had been added to your filings.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Sure.

[Neil Cataldi, Analyst at Blueprint Capital Management]

You know.

[Emmanuel Lakios, President and CEO at CVD Equipment]

So-

[Neil Cataldi, Analyst at Blueprint Capital Management]

The sort of reason behind adding that language. Really just because there's so much activity in this space right now. It seems like, you guys could be, you know, sitting in a good position.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Look, there are a few of our products that would address that, in a ramp-up, whether it's a silicon carbide PVT system. Again, that's gonna require some competitive position against the Chinese wafer suppliers. We also have other products in the past that we've sold to that would assist AI centers, but not on the chip level, more so on sometimes the power transport, whether it's superconducting tape or something of that sort.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Okay. Is the, you previously used to talk about the PVT200 system that was placed, you know, to an unknown customer other than, I guess, presumably Stony Brook. Is that still under evaluation?

[Emmanuel Lakios, President and CEO at CVD Equipment]

Well, Stony Brook, we have a relationship with Stony Brook, where we sold them two tools. We continue to collaborate with Stony Brook and that'll be in the future. The customer on the 200 that we had sold also was impacted by the downturn in the U.S. supply of silicon carbide wafers. They're still in a waiting pattern. If there was news to share, we would have.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Okay. Last question. The strategic alternatives language has been pretty consistent for a few quarters. Is there any additional color on whether you're evaluating the business as a whole, specific product lines or, you know, what's left of the facilities and, any sort of timeline on when investors may hear if there's a conclusion to the review?

[Emmanuel Lakios, President and CEO at CVD Equipment]

Well, the SDC was a strategic initiative. The SDC sale, great group. You know, we, I think benefited the shareholders by putting the cash on the balance sheet. Also the employees have a new home. We're pleased with that. As far as additional actions, we continue to look at options. We don't have anything to speak to today. When we do, we'll of course, you know, our shareholders will be aware of that.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Okay. Thanks, guys. Look forward to connecting offline as well.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Yeah. Yeah, we look forward to it, Neil. Thank you.

[Neil Cataldi, Analyst at Blueprint Capital Management]

Yeah. Yeah.

[Operator]

Our next question is from Paul Tcheka with MS&E Resource.

[Paul Tcheka, Analyst at MS&E Resource]

Hello, am I on now?

[Emmanuel Lakios, President and CEO at CVD Equipment]

Yes, you are, Paul. How are you?

[Paul Tcheka, Analyst at MS&E Resource]

All right. Fine, thanks. Thanks very much. The previous caller, nice to have him call in because you guys answered a lot of my questions based on his questions. I just wanted to say I'm very bullish on CVV near term and long term. You've got a lot of great potential for success in multiple applications from my perspective as a materials engineer who's worked in aerospace and the electronics area. I was intrigued by the silicon carbide boule project with Stony Brook. You've covered that already. The chip manufacturers, I think that's looking good. I wanna just voice my support for not using any of this cash that you have in hand for any kind of investor dividend or anything.

[Paul Tcheka, Analyst at MS&E Resource]

You've been very good over the years being very responsible and very methodical in using the cash you have. I'm really happy to hear that you've got this added cash for, you know, for your basis, for acquisitions or further developing your opportunities. I just wanted to throw that in there. Is there any other further work? I guess it's two-dimensional related, but gallium arsenide, gallium nitride, is that still a product line at all?

[Emmanuel Lakios, President and CEO at CVD Equipment]

It's still a product line, of course. Let me just jump into that. Product line, there's not a lot of, you know, we don't see a lot of demand in that area. We are seeing some exploratory, I would say exploratory because it's early stage, bubbling up of some new applications for some of the, you know, products that we had in the past. It's really too early to really discuss that. You know, we play in the advanced materials area, not specifically in, let's say LEDs or something of that sort on GaN. That's not our strength.

[Paul Tcheka, Analyst at MS&E Resource]

Yeah, sure. I just hadn't seen anything, you know, in press releases, and I guess it's for a good reason because it's not happening, much. All right. thank you very much. Your team's doing a great job, I think.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Appreciate it, Paul.

[Operator]

Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for any closing remarks.

[Emmanuel Lakios, President and CEO at CVD Equipment]

Thank you, operator, and thanks to everyone for joining us today. We appreciate your continued interest and in support of CVD Equipment Corporation. If you have any questions, please feel free, some of you do as well, to reach out to Rich or myself. This concludes today's call. Thank you.

[Operator]

Thank you again for your participation. You may now disconnect your lines.

Participants

Executives

• Emmanuel Lakios, President and CEO
• Richard Catalano, EVP and CFO

Analysts

• Neil Cataldi, Analyst at Blueprint Capital Management
• Paul Tcheka, Analyst at MS&E Resource