CVD Equipment Corp (CVV)

A. Company Overview

CVD Equipment Corp. has been serving the advanced materials markets for over 40 years. With its headquarters in Central Islip, New York, the company also has locations in Saugerties, New York, and Nordborg, Denmark. CVD designs, develops, and manufactures a wide range of equipment for the compound semiconductor, semiconductor, aerospace, battery energy storage markets, as well as advanced industrial applications and research.

B. Operating Segments

CVD conducts its business through three reportable operating segments:

1. CVD Equipment: Supplies chemical vapor deposition, physical vapor transport, and thermal process equipment.
2. SDC: Designs and manufactures ultra-high purity gas and chemical delivery control systems.
3. CVD Materials: Provides products related to advanced materials and coatings.

C. Business Strategy and Leadership

In January 2021, Emmanuel Lakios was appointed as President and CEO of CVD Equipment Corp. with the objective of improving sales growth and profitability. The company is focused on monitoring and improving its results in line with anticipated revenue levels.

D. Key Company Strengths

With over 40 years of equipment experience, CVD Equipment Corp. uses its capabilities in process development, engineering, and vertical manufacturing to turn emerging applications into mainstream manufacturing solutions. The company has built a library of design expertise and innovative solutions to assist customers in developing intricate processes and accelerating production and commercialization. CVD Equipment Corp. leverages its core competencies in equipment and software design, manufacturing, and process development to engineer finished products and provide customers with enabling tools to optimize and control their processes effectively. The company also offers an Application Laboratory where customers can collaborate with scientists and engineers to optimize process performance.

E. Expansion and Target Markets

CVD Equipment Corp. is expanding its presence in major target markets by developing a line of proprietary standard use products. Previously, the company manufactured products for research and development on an application-specific basis, but now aims to leverage its technological expertise to provide a broader standardized product line. CVD Equipment Corp. markets and sells its standardized systems, named CVD, FirstNano, and EasyTube®, to commercial companies, universities, and research laboratories in the United States and worldwide.

F. Growth Strategies

The company's core strategy involves focusing on growth market applications in end markets related to the "electrification of everything" and aerospace. CVD Equipment Corp. aims to expand its product offerings in the high power electronics market and explore opportunities in the power electronics market by developing new systems for silicon carbide crystal production. Additionally, the company received an order for a production chemical vapor infiltration (CVI) system used to manufacture ceramic matrix composite materials (CMCs) for gas turbine jet engines in the aerospace industry.

G. Major Target Markets

CVD Equipment Corp.'s major target markets include high power electronics, EV battery materials/energy storage, and aerospace and defense. The company aims to contribute to improving energy efficiency in these markets.

H. Products and Technology

The company offers a range of products and technologies, including chemical vapor deposition/infiltration systems, physical vapor transport systems, rapid thermal processing systems, annealing and diffusion furnaces, ultra-high purity gas and liquid control systems, quartzware, Tantaline® corrosion resistant coating services, and MesoPlasma™ direct write printing. CVD Equipment Corp. provides both standard and emerging applications-specific products.

I. Competition and Supply Chain

CVD Equipment Corp. faces intense competition from both domestic and international competitors in all its product segments. The company's supply chain consists of unrelated suppliers for many of its components and raw materials. CVD Equipment Corp. also maintains in-house manufacturing capabilities to fabricate metal components and quartzware.

J. Backlog

As of December 31, 2022, CVD Equipment Corp.'s backlog was approximately $17.8 million, representing orders from customers yet to be fulfilled. The backlog includes contracts in progress and orders received. The completion timeframe of the backlog varies depending on the product mix.

K. Government Regulations

The company is subject to various federal, state, and local government regulations, including environmental, labor, and export control regulations. CVD Equipment Corp. maintains compliance with these regulations and monitors changes that may impact its business.

L. Product Liability and Employee Safety

CVD Equipment Corp. ensures that its products adhere to design limits and safety standards to minimize potential exposures to personal injury and property damage. The company maintains strong environmental, health, and safety protocols to protect the health and well-being of its employees, customers, suppliers, and stakeholders.

M. Research and Development

The company conducts research and development to develop new products based on market analysis and customer requests. CVD Equipment Corp. collaborates with universities, startup companies, and customers to leverage collective expertise and capitalize on commercial opportunities in the future.

N. Sources of Supply

CVD Equipment Corp. purchases components from unrelated suppliers and maintains a fully equipped machine shop for in-house fabrication. The company undergoes rigorous quality control processes to ensure that purchased materials and internally manufactured parts meet its requirements.

O. Intellectual Property

CVD Equipment Corp. protects its proprietary technology through patents, non-disclosure agreements, trademarks, and copyrights. The company files for patent protection for proprietary technology that can be incorporated into its products. It also protects trade secrets and other proprietary information through non-disclosure agreements and security measures.