q3 2015 corporate overview - cvd equipment corporation · nanomaterials, superconducting materials,...
TRANSCRIPT
enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
Q3 2015 Corporate OverviewNASDAQ: CVV
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
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 1995. 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.
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
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
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Facilities
Headquarters – Central Islip, NY130,000 ft2 facility
Application Lab – Central Islip, NY6,000 ft2 facility
SDC Division – Saugerties, NY22,000 ft2 facility with 4,000 ft2 cleanrooms
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Company HistoryLeveraging know-how and expanding customer base to accelerate growth
1982
1999
2001
2002
2005
2006
2013
ResearchInternational
Conceptronic
Facilities152,000 ft2
Company owned
ApplicationLab opens
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Our Company and Product Lines
R&D products for processing graphene, carbon
nanotubes, semiconducting nanowires, 2D materials,
and thin films for research laboratories
Design, develop and manufacture process
equipment solutions for pilot and production
applications
Ultra high purity (UHP) gas and chemical delivery systems for high-tech fabrication processes
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Our Core CompetenciesDesign, 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 over 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
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Our Customers are InnovatorsWe create research and development systems for university, government and industrial research laboratories
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Our Customers are Market LeadersWe deliver innovation and expertise to major technology corporations and Fortune 500 companies
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
What is CVD? Chemical Vapor Deposition
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
= Chemistry + Temperature + Pressure Control
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
We Master the Technology Life CycleWe help guide our customers from research to profitability
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
We Adapt to Global Market Trends
AerospaceAging fleet and increased demand for flights will require >30,000 new commercial aircraft over the next 20 years
MedicalUS 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
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
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
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™Aerospace ApplicationsTaking 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
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 2015-2034. (2015). Retrieved August 12, 2015 from http://www.boeing.com/resources/boeingdotcom/commercial/about-our-market/assets/downloads/Boeing_Current_Market_Outlook_2015.pdf
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Commercial Aircraft Market Outlook*
The estimated world market value increased from $4.8 trillion in 2013 to $5.6 trillion in 2014. 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 2015-2034. (2015). Retrieved August 12, 2015 from http://www.boeing.com/resources/boeingdotcom/commercial/about-our-market/assets/downloads/Boeing_Current_Market_Outlook_2015.pdf
Airlines Focusing on efficiency and flexibility Older, less efficient airplanes replaced with more efficient, newer generation airplanes
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2014 2034
Units
Retained Replacement Growth
Current Fleet
0%
20%
40%
60%
80%
100%
120%
1994 2014 2034
Share of Fleets
Small Medium Large
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™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%**
*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 2021. J Bone Joint Surg Am. 2014, 96A(8), 624.
**Nachiket Ghumare, Medical Device Coatings Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 - 2020, Transparency Market Research
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
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
*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 2021. J Bone Joint Surg Am. 2014, 96A(8), 624.
Primary Hip Arthroplasty
Primary Knee Arthroplasty
Annual Number of Procedures in the US
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™
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
Large thin curved panel
displays
Batteries
Vertically aligned silicon
nanowires
Computer components
Semiconductordevices
Randomly aligned silicon
nanowires
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
Research Market*Targeted market segments:• Universities
• Industrial R&D
• Technology Incubators
• Startups and Joint Business Ventures
Commercialization
Exploration
Discovery
InfrastructureCVD IP leveraged to bridge the
gap for commercial scale up
Basic manufacturing
research
Proof of concept
Production in
laboratory
Capacity to produce
prototype
Capacity in
productionenvironment
Demonstration of production
rates
Funding/Investment
High
Low
Government and Universities
IndustriesGAP
Manufacturing-innovation process
*U.S. Government Accountability Office, NANOMANUFACTURING AND U.S. COMPETITIVENESS:Challenges and Opportunities. (May 20, 2014) Retrieved August 12, 2015, from http://www.gao.gov/products/GAO-14-618T
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
2D MaterialsTransition 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 – MoS2, WSe2, 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
*Number of academic publications featuring chemical vapor deposition of TMDs.
Currently >10 publications per month
*Data from Web of Science, Thomson Reuters Corporation
0
20
40
60
80
100
120
140
160
2010 2011 2012 2013 2014
# of publications
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
2D MaterialsTransition Metal Dichalcogenides
NSF funded industrial partnership with Penn State University for the development and commercialization of TMDs
Helps keep CVD Equip. Corp at the forefront of this emerging market
We will continue to participate in this collaboration through 2016 CVD Equipment Corporation will play a role as an industrial partner by providing new
equipment platforms
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
2D MaterialsTransition Metal Dichalcogenides
We offer new products for 2D material synthesis through our FirstNanoTM product line
SEM of TMD crystals producedon FirstNano™ TMD system
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™IP DevelopmentsOngoing 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
10-100X 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
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™
Technology DevelopmentsContinuous 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.
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™
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
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
• Installation and performance testing
• After-sales customer support
• Integrated system design, engineering, and manufacturing
• Quartzware design and fabrication
• Fully equipped machine shop
enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
Financial InformationTHROUGH Q3FY15
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
™
Three and Nine Months Ended September 30, 2015(in thousands except per share information)
Reconciliation of GAAP to Non-GAPP Financial Data(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30 Nine Months Ended September 30
2015 2014 2015 2014
Revenue, as reported $ 10,646 8,867 $ 30,772 19,360
Gross profit, as reported 4,125 3,309 12,042 7,328
Operating expenses, as reported 3,255 2,097 8,448 6,007
Adjustments
Nonrecurring loss and legal fees on litigation settlement 1,160 1,550
Non-GAAP operating expenses 2,095 2,097 6,898 6,007
Non-GAAP operating income 2,030 1,212 5,144 1,321
Net income as reported 811 858 2,814 792
Adjustments, net of tax
Nonrecurring loss and legal fees on litigation settlement 1,160 1,550
Non-GAAP income, net of tax 1,971 858 4,364 792
Diluted earnings per share, as reported $0.13 $0.14 $0.45 $0.13
Add back:
Per share impact of Non-GAAP adjustment, net of tax 0.19 0.24
Non-GAAP per share earnings 0.32 0.14 0.69 0.13
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
™
CVD Equipment Corporation and SubsidiariesCondensed Consolidated Balance Sheets
(In thousands)(Unaudited)
September 30, 2015 December 31, 2014
Assets
Current assets:
Cash and cash equivalents $13,269 $11,967
Accounts Receivable, net 5,054 6,463
Costs and estimated earnings in excess of
billings on contracts in progress 2,512 2,499
Inventories 3,647 4,842
Restricted cash 200 200
Deferred Taxes 2,099 2,888
Other current assets 104 195
Total current assets 26,885 29,053
Property, plant and equipment, net 14,975 15,415
Deferred taxes 1,360 750
Restricted cash --- 200
Other assets 95 83
Intangible assets 60 56
Total assets $43,375 $45,557
September 30, 2015 December 31, 2014
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,838 $1,683
Accrued expenses and other current liabilities 3,883 3,297
Current portion of long-term debt 685 720
Billings in excess of costs and estimated
earnings on contracts in progress 753 1,328
Deferred revenue 235 489
Accrued litigation settlement --- 4,925
Total current liabilities 7,394 12,442
Long-term debt 3,341 3,846
Total liabilities 10,735 16,288
Total stockholders' equity 32,640 29,269
Total liabilities and stockholders' equity $43,375 $45,557
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
November 2015 | © 2015 CVD Equipment Corporation All rights reserved
™
Financial Trends
Increasing revenue driven by large scale production orders
Discipline on gross margin
Well capitalized / solid balance sheet
Pipeline of opportunities with existing and new customers
Higher HighsHigher Lows
Discipline on Gross Margin
*TTM ending 9/30/2015
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™November 2015 | © 2015 CVD Equipment Corporation | All rights reserved
™
enabling tomorrow’s technologies™enabling tomorrow’s technologies™enabling tomorrow’s technologies™
SummaryCVD Equipment Corporation continues to expand capabilities in:
Equipment designProcess developmentMaterials applicationsIP developmentManufacturing
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