Except for historical information contained herein, this "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contains forward-looking statements within the meaning of the
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Coronavirus (COVID-19)
We have been actively monitoring the coronavirus ("COVID-19") outbreak and its
impact globally. Our primary focus to this point has been to ensure the health
and safety of our employees. To that end, we have adopted social distancing
practices where appropriate, implemented travel restrictions, and have taken
actions to ensure that our facilities are cleaned and sanitized regularly.
These are novel and challenging times and the magnitude of this crisis is
requiring us to consider all options to promote the safety of employees,
including, where appropriate, or where required to comply with foreign,
national, state or local governmental authority recommendations, guidelines,
and/or mandates, the temporary reduction or suspension of work at certain of our
locations and production facilities to protect employees and curb the spread of
the coronavirus. All of these factors have adversely impacted our operating
results. In particular, the aerospace sector, for which we rely on for a
significant part of our business, has been faced with significant reductions to
its business due to reduced air travel which has negatively affected new order
bookings and has materially and adversely affected the Company's revenues to
date. Due to the timing of the COVID-19 outbreak, our new order levels during
the first quarter of 2021 have seen continued substantial reductions, while new
orders in the second, third, and fourth quarters of 2021 were substantially
higher at approximately
Executive Level Summary
CVD has continued to serve the advanced materials markets with chemical vapor
and thermal process equipment for over 38 years. Our products are used in
research and development centers as well as in production environments. We
develop, design, manufacture and service a broad range of chemical vapor
deposition, gas control and other state-of-the-art process equipment and
solutions used in advanced materials and coatings. We serve markets ranging from
academic/research initiatives to industrial applications. With the adoption of
our technology in these markets we see increased usage of our systems across
production environments. Major target markets for our business include advanced
nanomaterials, batteries and Silicon Carbide for high power electronics;
aerospace gas turbine engines and structural components; medical devices (such
as implants); advanced semiconductor devices and Silicon for solar cells; and
carbon nanotubes and nanowires. Our
Based on more than 38 years of experience, we use our capabilities in process development, engineering and vertical manufacturing to transform new applications into mainstream manufacturing solutions. We have built a significant library of design expertise, know-how and innovative solutions to assist our customers in developing these intricate processes and to accelerate their production and commercialization. This library of equipment design solutions, along with our manufacturing and systems integration facilities, allows us to provide application-specific design, process and manufacturing solutions to our customers.
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To expand our presence into various growth markets, we are developing a line of
proprietary standard use products to complement our customized legacy systems.
Historically, we manufactured products for research and development on an
application-specific basis to meet an individual customer's specific research
and production requirements. Our proprietary systems leverage the technological
expertise that we have developed through designing these custom systems into a
broader standardized product line. The standard product line is easily
configured from a wide range of available options to meet diverse product and
budgetary requirements. Manufacturing these standardized systems in higher
volumes provides us the flexibility to reduce both the cost and delivery time of
our systems. These systems, which we market and sell under the EasyTube® and CVD
product lines, are sold to universities, research laboratories, and production
companies in
Sales of our proprietary standard systems, custom systems and process solutions have been driven by our installed customer base, which includes Fortune 500 companies. The performance and success of our products has historically driven repeat orders from existing customers as well as generated business from new customers. Furthermore, with our proprietary solutions and expanded focus on "accelerating the commercialization of tomorrow's technologies"TM we have been developing a new customer base in addition to growing with our existing customers. We have generally gained new customers through our industry reputation, as well as limited print advertising and trade show attendance (which has been negatively impacted by COVID-19 in 2020, 2021 and into 2022).
Our core competencies in equipment and software design, manufacturing and
process development are used to engineer our finished products and to accelerate
the commercialization path of our customer base. Our proprietary real-time
software allows for rapid configuration, and provides our customers with
enabling tools to understand, optimize and repeatedly control their processes.
These factors significantly reduce cost, improve quality and reduce the time it
takes between customers' orders and the shipment of our products. Our
In 2021 and into 2022 our focus has been on our growth markets, the development of standard product solutions and being able to provide solutions from gas/liquid storage through process and process by-product treatment. This has allowed us to provide increased value to our customers.
2022 Developments
In 2021, we launched our strategy to transition the focus of the Company to standardized products serving global growth application markets. Our growth opportunities in 2022 are consistent with our strategic plan to address and serve growth production markets.
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In the first three months of 2022, and in the month of
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