CVD Equipment (CVV) Reports Q4 Loss of $0.80
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CVD Equipment (NASDAQ: CVV) reported Q4 EPS of ($0.80), versus ($0.40) reported last year. Revenue for the quarter came in at $3.2 million, versus $5.6 million reported last year.
Thomas McNeill, Chief Financial Officer, said, “In order to increase our liquidity and to provide necessary working capital to support our on-going business and operations, we have decided to sell our facility located at 555 North Research Place, Central Islip, NY, and on March 29, 2021 we entered into an agreement to sell this building for a purchase price of $24,360,000, subject to the satisfaction or waiver of certain conditions to closing or contingencies. A portion of the sale proceeds would be used to satisfy the existing mortgage debt of approximately $9.3 million at December 31, 2020, and to pay various transaction-related costs in an amount to be determined. Any excess proceeds will be used for general working capital purposes. Further, we have determined the 555 Building is not needed for present and future business operations and that any remaining elements of the Materials business can be consolidated into our remaining facility in Central Islip, NY, which we believe can accommodate any needs for our growth for the foreseeable future.”
In late January under the leadership of the Company’s newly appointed President and Chief Executive Officer Emmanuel Lakios, the Company embarked on an evaluation of our business by market and product segments. This analysis is based on market growth, cash generation and over all return on investment, which confirmed that the equipment systems and production spares are the core elements of the Company’s business.
Mr. Lakios said, “2020 was a year of unchartered waters for the global economy. Our business was not immune to the COVID pandemic. The decline in global travel, especially longer distance and long haul travel, caused a decline in demand for aircraft and engines, which in turn impacted our equipment business. Other end use aspects of our business were also negatively impacted such as university projects, as universities were shuttered and moved to remote learning.
“Our focus will be on utilizing our 38 years of developed technology for increasing production end use applications. This standardization allows us to provide more value and maturity of our products, bringing more support and value to our customers and the ability for improving our gross margins.
“Our Tantaline product line, which was acquired in 2016, and in which we have invested to expand the market and operational capability in Denmark, as well as the US facility, has not met our expectations. Our evaluation is that the Denmark facility currently has ample production capacity and that the USA Tantaline facility and operations are not required to serve the Tantaline market. Our objective is to have the Tantaline product line be cash neutral and to minimize any further investment requirement. We will continue to evaluate the viability of the Tantaline product line over the quarters to come.
“As we committed to you in January 2021, we will continue to provide timely communication to our shareholders. Towards that end, we will hold our annual shareholder meeting in mid-July and we will continue to communicate on important developments in the meanwhile.”
For earnings history and earnings-related data on CVD Equipment (CVV) click here.
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