Q Corporate Overview

Transcription

1 Q Corporate Overview NASDAQ: CVV

2 Safe Harbor Statement Certain statements in the following presentation relate to future results that are forward looking statements as defined in the Private Securities Litigation Reform Act of Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to those noted in our forms 10-K, 10-Q, and other filings with the SEC. This presentation includes historical and forward-looking ProForma information. The Company assumes no responsibility to update the information contained in this presentation.

3 CVD Equipment Corporation at a Glance Founded in 1982 Provider of industry leading chemical vapor deposition equipment Headquarters in Long Island, New York Additional facility in Saugerties, New York Worldwide network of sales representatives ~200 employees

4 Facilities Headquarters Central Islip, NY 134,500 ft 2 facility Application Lab Central Islip, NY 6,000 ft 2 facility inside headquarters SDC Division Saugerties, NY 22,000 ft 2 facility with 4,000 ft 2 cleanrooms

5 Company History Leveraging know-how and expanding customer base to accelerate growth Research International Conceptronic Application Lab opens Facilities 156,500 ft 2 Company owned

6 Our Company and Product Lines Design, develop and manufacture process equipment solutions for pilot and production applications R&D products for processing graphene, carbon nanotubes, semiconducting nanowires, 2D materials, and thin films for research laboratories Ultra high purity (UHP) gas and chemical delivery systems for high-tech fabrication processes

7 Our Core Competencies Design, develop and manufacture: custom and standard Chemical Vapor Deposition systems Recognized leader: a key equipment provider to industry; blue-chip companies; innovative start-ups; leading university, industrial and government research laboratories for 33+ years Proprietary edge: a significant library of homegrown solutions and know-how for intricate processes across a broad range of applications in aerospace, medical, semiconductor, solar, glass coating, nanomaterials, superconducting materials, etc Vertically integrated: internal design and manufacturing capability enables rapid system development. We procure raw materials & components and deliver finished systems Turnkey systems: includes instrumentation, process control software, gas delivery, process chambers, vacuum systems, and exhaust abatement equipment Application laboratory: product and material development

8 Our Customers are Innovators We create research and development systems for university, government and industrial research laboratories

9 Our Customers are Market Leaders We deliver innovation and expertise to major technology corporations and Fortune 500 companies

10 What is CVD? Chemical Vapor Deposition = Chemistry + Temperature + Pressure Control Chemical Vapor Deposition is the controlled decomposition of gases used to deposit a material onto a surface Requires multidisciplinary engineering: process chamber design, temperature control, gas and vapor flow, pressure control, and automation to achieve the desired deposit The Chemical Vapor Deposition process has proven itself to be robust, economical and scalable over many years in semiconductor manufacturing. For 33+ years we have been successfully applying this technology to other industries

11 We Master the Technology Life Cycle We help guide our customers from research to profitability

12 We Adapt to Global Market Trends Aerospace Aging fleet and increased demand for flights will require >30,000 new commercial aircraft over the next 20 years Medical US market for knee replacements expected to reach 3.48M units per year by 2030 Research Multi-million dollar government grants in 2015 for graphene, 2D materials and other nano-material development

13 We Align Business Operations to Major Market Opportunities Aerospace Initial production phase, anticipated to be multi-year, multi-unit program Medical Multi-unit production phase Research Investment Industrial partnership in NSF funded consortium

14 AEROSPACE

15 Leading Supplier of Next Generation Technology for the Aerospace Industry Received a $30 million order this quarter from a major aviation component supplier to build fiber coating systems for their new high volume facility. An initial CVD system was previously delivered to this customer in late 2015 and has since undergone testing and successful production at the customer s facility. Being selected to provide fiber coating equipment for this customer s new high volume facility is a testament to our differentiated technology, and confirms CVD s leading position as a key supplier of next generation technology for the aerospace industry.

16 Aerospace Applications Taking Off* Aging fleet and increased demand will drive the need for >30,000 new commercial aircraft over the next 20 years Fuel costs account for over 30% of the operating cost for an airline Weight reduction and increased engine efficiency are the key drivers for deployment of new materials Latest generation of aircraft contain as much as 53% composite materials by weight Many new materials require specialty coatings made by Chemical Vapor Deposition June CVD Equipment Corporation All rights reserved CVD Equipment Corporation delivered several multi-million production system in FY2014 and 2015 driven by the new material requirements in the Aerospace Industry *Boeing, Current Market Outlook (2015). Retrieved August 12, 2015 from resources/boeingdotcom/commercial/about-our-market/assets/downloads/boeing_current_market_outlook_2015.pdf

17 Commercial Aircraft Market Outlook* Airlines Focusing on efficiency and flexibility Share of Fleets 120% 100% 80% 60% 40% 20% 0% Small Medium Large Older, less efficient airplanes replaced with more efficient, newer generation airplanes Units 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Current Fleet Retained Replacement Growth The estimated world market value increased from $4.8 trillion in 2013 to $5.6 trillion in Demand for new aircraft and improved fuel economy are key drivers for developing new materials and coatings. A 10-20% increase in fuel efficiency is driving this market. *Boeing, Current Market Outlook (2015). Retrieved August 12, 2015 from resources/boeingdotcom/commercial/about-our-market/assets/downloads/boeing_current_market_outlook_2015.pdf

18 MEDICAL

19 Medical Device Manufacturing Market Medical device coatings are widely used to augment product surface function and to improve performance Economic downturn in late 2000 s did not slow demand for total joint arthroplasty* Expansion of U.S. healthcare spending between 2011 and 2021, from $2.7 trillion to $4.8 trillion, is anticipated to fuel the future demand for arthroplasty* The global medical device coatings market is predicted to rise from US$6.6 billion in 2013 to US$10.9 billion in 2020, with a compound annual growth rate (CAGR) of 7.40%** June CVD Equipment Corporation All rights reserved *Kurtz S, Ong K, Lau E, et al. Impact of the Economic Downturn on Total Joint Replacement Demand in the United States, Updated Projections to J Bone Joint Surg Am. 2014, 96A(8), 624. **Nachiket Ghumare, Medical Device Coatings Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast , Transparency Market Research

20 Medical Device Manufacturing Market Knee & Hip Replacements in the US* Current status 800,000 per year Future projection 1,500,000 by 2020 Production scale CVD coating equipment Annual Number of Procedures in the US Primary Knee Arthroplasty Primary Hip Arthroplasty *Kurtz S, Ong K, Lau E, et al. Impact of the Economic Downturn on Total Joint Replacement Demand in the United States, Updated Projections to J Bone Joint Surg Am. 2014, 96A(8), 624.

21 RESEARCH & DEVELOPMENT

22 Nanomaterials & Applications Graphene Microprocessors & Integrated Circuits Large Flat and Curved Displays Filtration Carbon Nanotubes Batteries Capacitors Advanced Composites Thin Films and Nanowires Solar Semiconductors Batteries Transition Metal Dichalcogenides Semiconductors Optoelectronic Devices Flexible Electronics June CVD Equipment Corporation All rights reserved Vertically aligned silicon nanowires Large thin curved panel displays Randomly aligned silicon nanowires Computer components Batteries Semiconductor devices

23 Research Market* Funding/ Investment High Targeted market segments: Universities Industrial R&D Technology Incubators Startups and Joint Business Ventures Government and Universities GAP CVD IP leveraged to bridge the gap for commercial scale up Industries Commercialization Infrastructure Low Manufacturing-innovation process Basic manufacturing research Proof of concept Production in laboratory Capacity to produce prototype Capacity in production environment Demonstration of production rates Exploration Discovery *U.S. Government Accountability Office, NANOMANUFACTURING AND U.S. COMPETITIVENESS: Challenges and Opportunities. (May 20, 2014) Retrieved August 12, 2015, from

24 2D Materials Transition Metal Dichalcogenides New 2D materials show promise for disruptive technologies Early R&D proof of principle phase 2D Transition Metal Dichalcogenides (TMDs), are rapidly gaining popularity MoS 2, WSe 2, etc Applications include: High speed electronics and optoelectronics Flexible devices Next generation solar cells Touch screen display panels Chemical vapor deposition is the method of choice for controlled growth of these crystal structures The increasing number of research publications is a leading indicator of available funds and equipment demand # of publications *Number of academic publications featuring chemical vapor deposition of TMDs. Currently >10 publications per month *Data from Web of Science, Thomson Reuters Corporation

25 2D Materials to the Next Level Transition Metal Dichalcogenides Early 2016 we entered into the next phase in the industrial partnership with Penn State University to advance 2D crystal device development The National Science Foundation s Materials Innovation Platform (MIP) recently announced that it has awarded Penn State University (PSU) $17.8M payable over five years CVD will contribute through supply and development of equipment required for synthesizing the 2D materials at wafer scale This will help keep CVD Equipment Corporation at the forefront of this emerging market The promise of emerging 2D materials, including graphene, boron nitride, and transition metal dichalcogenides, for revolutionizing the semiconductor and electronic device industries is reinforced by this platform award from the National Science Foundation We are pleased to continue to benefit from the industrial perspective and specialized equipment manufacturing expertise that CVD Equipment Corporation brings as part of our ongoing collaboration. Joan Redwing Professor of Materials Science and Engineering, Chemical Engineering and Electrical Engineering

26 2D Materials Transition Metal Dichalcogenides We offer systems configured for 2D material synthesis through our FirstNano product line SEM of TMD crystals produced on FirstNano EasyTube system

27 CMOS, PV, MEMS, and NEMS Applications Enabled by CVD Technology MULTI-TUBE HORIZONTAL FURNACE SYSTEMS EasyTube 6000 Series The EasyTube 6000 series multi-tube horizontal furnace systems are automatically controlled research units for batch processing of up to 100 wafers per run per tube, with up to four separately configured process tubes. PROCESSES Annealing Oxidation LPCVD Dopant Diffusion FEATURES Mounting Choices Atmospheric or Low Pressure Cantilevered Loading System Cascade Temperature Control Innovative Modular Platform

28 IP Developments Ongoing research in CVD s application laboratory Proprietary patent pending technologies for: 300 mm size high quality graphene films 3-10X increase in production capacity at a lower cost for high quality graphene on Cu foil X increase in production capacity at a lower cost for graphene on Cu foil roll 5-10X increase in production capacity for vertically aligned mm long CNTs 5-10X increase in production capacity for SiNWs June CVD Equipment Corporation All rights reserved

29 Technology Developments Continuous improvement through product and live process development Material handling and automation Fibers Porous materials 3D shaped parts Wafers, foils, tapes, etc. Advanced control systems for temperature, pressure, and precursor flow Gas delivery and exhaust abatement solutions for a growing range of industrial processes Control software and safety systems Patent pending reactor designs for next generation 1D and 2D nanomaterials, including graphene, carbon nanotubes, silicon nanowires, etc. June CVD Equipment Corporation All rights reserved

30 Vertically Integrated Capabilities Vertically integrated design and manufacturing enables rapid system development We procure raw materials & components and deliver finished systems We leverage a network of industry leading suppliers and contractors as required Integrated system design, engineering, and manufacturing Fully equipped machine shop Provide turnkey systems including instrumentation, process control software, gas handling, and exhaust abatement 33 + years of experience in design, engineering, and manufacturing of chemical vapor deposition equipment Application laboratory to support process, equipment, and material development Quartzware design and fabrication Installation and performance testing After-sales customer support June CVD Equipment Corporation All rights reserved

31 $ FINANCIAL INFORMATION Through Q2 2016

32 CVD Equipment Corporation and Subsidiaries Comparison of Consolidated Statements of Operations (in thousands) Three Months Ended June 30 Six Months Ended June Revenue $3,744 10,434 $8,747 20,127 Gross profit 494 4,157 2,027 7,917 Operating expenses 1,475 2,640 3,540 5,193 Operating (loss)/income (980) 1,517 (1,513) 2,724 Net (loss)/income (496) 1,335 (833) 2,003 Diluted earnings per share ($0.08) $0.21 ($0.13) $0.32

33 CVD Equipment Corporation and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) June 30, 2016 December 31, 2015 Assets Current assets: Cash and cash equivalents $14,037 $13,073 Accounts Receivable, net 7,771 3,091 Costs and estimated earnings in excess of billings on contracts in progress 2,860 4,635 Inventories 3,085 2,987 Restricted cash Deferred Taxes Other current assets Total current assets 28,603 24,551 Property, plant and equipment, net 14,455 14,828 Deferred taxes 1,816 1,607 Other assets Intangible assets Total assets $45,000 $41,132 June 30, 2016 December 31, 2015 Liabilities and stockholders' equity Current liabilities: Accounts payable $348 $308 Accrued expenses and other current liabilities 2,747 3,446 Current portion of long-term debt Billings in excess of costs and estimated earnings on contracts in progress 5, Deferred revenue Total current liabilities 8,685 4,642 Long-term debt 3,115 3,265 Total liabilities 11,800 7,907 Total stockholders' equity 33,200 33,225 Total liabilities and stockholders' equity $45,000 $41,132

34 Revenue $MM Gross Margin % Financial Trends $45 60% Increasing revenue driven by large scale production orders $40 $35 Higher Highs Higher Lows Discipline on Gross Margin 50% Discipline on gross margin Well capitalized / solid balance sheet Pipeline of opportunities with existing and new customers $30 $25 $20 40% 30% $15 20% $10 $5 10% $0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 0% June CVD Equipment Corporation All rights reserved Revenue USD Mil Gross Margin %

35 Summary CVD Equipment Corporation continues to expand capabilities in: Equipment design Process development Materials applications IP development Manufacturing CVD Equipment Corporation continues to support process and material development opportunities to advance the state-of-the-art CVD Equipment Corporation continues to lead in the development of research, pilot, and production equipment to support the generation of new products