CVD Equipment Stock Down Despite Y/Y Uptick in Q4 Earnings, Revenues

Core Viewpoint - CVD Equipment Corporation (CVV) has shown resilience in its stock performance despite broader market downturns, with significant year-over-year revenue growth and a return to net income in the fourth quarter of 2024 [1][3][10]. Quarterly Revenue and Earnings Performance - Fourth-quarter 2024 revenues reached $7.4 million, an 80.3$4.1 million in the same quarter of the previous year, although slightly below the $8.2 million in the third quarter of 2024 [2]. - Net income for the quarter was$132,000 or $0.02 per share, compared to a net loss of$2.3 million or $0.33 per share in the fourth quarter of 2023 [3]. - Gross profit was$2 million, reflecting a margin of 27.3%, a significant improvement from a gross loss of $348,000 in the prior year [3]. Full-Year Performance - For the full year 2024, revenues increased by 11.5$26.9 million from $24.1 million in 2023, while the net loss narrowed to$1.9 million or $0.28 per share from$4.2 million or $0.62 per share in 2023 [4]. Order Activity and Backlog - Fourth-quarter orders totaled$7.1 million, with a notable $3.5 million follow-on order for the CVI/CVD3500 system from an existing aerospace customer [5]. - Full-year orders rose 8.9$28.1 million from $25.8 million in 2023, driven by demand in aerospace and industrial markets [5]. - The year-end backlog increased by 4.9$19.4 million from $18.4 million, indicating steady customer interest [6]. Segment Performance - The CVD Equipment segment was the primary driver of revenue growth, benefiting from aerospace and industrial contract activity [7]. - The SDC segment experienced a 28.8$1.3 million inventory write-down on PVT150 systems [8]. - Operating loss for 2024 was reduced to $2.4 million from$4.9 million in 2023, aided by gains from the sale of equipment related to discontinued operations [8]. Cash Position - Cash and cash equivalents at year-end were $12.6 million, down from$14 million a year earlier, while working capital slightly decreased to $13.9 million from$14.3 million [9]. Management Commentary - CEO Emmanuel Lakios highlighted the company's progress in navigating complex market conditions and noted the achievement of positive net income for two consecutive quarters [10]. - CFO Richard Catalano acknowledged challenges from inflation and supply chain costs but expressed confidence in the company's cash position and cost control efforts [10]. Market Challenges - The silicon carbide market, particularly for 150 mm wafers, faces challenges due to global overcapacity and declining wafer prices, impacting future orders [11]. - Management indicated that future orders will depend on broader market recovery and capacity needs [11]. Strategic Focus - The company discontinued its MesoScribe product line in 2024 to focus on core CVD and SDC businesses, reflecting a strategic effort to streamline operations [13]. - Ongoing strategic investments in R&D and sales are aimed at positioning the company for long-term growth and profitability [12].