CVD Equipment Corporation Q3 FY2025 earnings call

• Board of directors approved a comprehensive transformation strategy including transitioning CVD Equipment business from vertically integrated fabrication to outsourced fabrication of certain components to reduce fixed costs and improve scalability; workforce reduction in CVD Equipment division to be completed by year-end 2025, expected to reduce annual operating cost by ~$2 million from 2026, with SDC division unaffected. • Revising sales approach by leveraging distributors and external representatives to complement internal sales force and broaden market reach. • Exploring strategic alternatives for certain businesses and product lines, including asset sales and divestitures. • In October 2025, announced a new order from Stony Brook University for two PVT-150 physical vapor transport systems. • Continuing development of 200-millimeter silicon carbide crystal growth process using PBT-200 system, and evaluating the platform for other wide bandgap materials like aluminum nitride.

For the third quarter 2025, revenue was $7.4 million, a 9.6% decrease from the prior year quarter but a 44.9% increase compared to the second quarter of this year. Revenue to date was $20.8 million, 7.1% higher than the same period in 2024. Orders for the third quarter totaled $2.2 million, primarily from the SDC segment for gas delivery systems. The SDC segment reported $1.7 million in revenue in the third quarter, down slightly from $1.9 million in Q3 2024. The CVD Equipment segment's revenue in the third quarter was driven by three key customers, representing approximately 55% of total revenue for the quarter.

• Workforce reduction in CVD Equipment division to be completed by year-end 2025 will reduce annual operating cost by approximately $2 million beginning in 2026. • Current cash position and projected operating cash flows are sufficient to meet working capital and capital expenditure needs for at least the next twelve months. • Return to consistent profitability depends on new equipment orders, cost management, successful implementation of transformation plan, and continued control over capital expenditures.

• External factors including uncertainties related to tariffs, reduced US government funding for university research, US government shutdowns, and timing in product adoption within growth markets. • May recognize non-cash impairment charges in future periods if certain long-lived assets are sold below their book value.

Q: About applications for composite applications for combustion turbines for power generations and locations of materials outsourcing A: First, on ground-based gas turbine engines, silicon carbide-based composite materials CMCs are anticipated for future use in nuclear reactors and pellet encapsulation. On materials outsourcing, it's in the US, focusing on outsourcing machining to the US and extending to North America like Canada in some cases; quartz fabrication will be a mix, retaining IP and certain capabilities in machine shop but outsourcing lion's share of components