CVD Equipment Corporation reports 199% Net Income decline in 2018 and 40.8% Revenue decline
04/01/2019 • About CVD Equipment Corporation (
$CVV) • By InTwits
CVD Equipment Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: -16.9% in 2018, 19.7% in 2017, 0.4% in 2016, 13.9% in 2015, 7.0% in 2014
- CVD Equipment Corporation has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.5%. At the same time it's in pair with industry average of 8.7%
- CAPEX is quite volatile: $3m in 2018, $15m in 2017, $1m in 2016, $0m in 2015, $1m in 2014
- The company has unprofitable business model: ROIC is -10.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is -1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 40.8%. Revenue decline showed acceleration in 18Q4 - it was 51.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.4 pp from -2.3% to 9.1% in 2018.
Gross Margin dropped on 21.5 pp from 42.8% to 21.3% in 2018. SG&A as a % of Revenue jumped on 16.2 pp from 24.2% to 40.4% in 2018.
Net Income margin dropped on 34.2 pp from 12.8% to -21.4% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 CVD Equipment Corporation had CAPEX/Revenue of 10.4%. The company's CAPEX/Revenue increased on 9.8 pp from 0.64% in 2015 to 10.4% in 2018. Average CAPEX/Revenue for the last three years was 16.5%.
Return on investment
The company operates at negative ROIC (-10.2%) and ROE (-13.5%). ROIC dropped on 25.9 pp from 15.7% to -10.2% in 2018. ROE dropped on 27.5 pp from 14.0% to -13.5% in 2018.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from -0.1x to in 2018. Debt decreased on 4.0% while cash dropped on 19.5%.
CVD Equipment Corporation has no short term refinancing risk: cash is higher than short term debt (1,333.9%).
Management team
The company's CEO is Leonard A Rosenbaum. Leonard A Rosenbaum is a founder and has 37 years tenure with the company. The company's CFO is Thomas Mcneill. Thomas Mcneill has 0 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
CVD Equipment Corporation ($CVV) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 27.990 | 38.965 | 20.955 | 41.129 | 24.334 | -40.8% |
| Gross Profit | 11.525 | 15.146 | 7.105 | 17.600 | 5.178 | -70.6% |
| SG&A | 9.487 | 8.953 | 8.024 | 9.944 | 9.826 | -1.2% |
| EBITDA | 1.959 | 5.419 | 0.089 | 8.086 | -4.113 | -150.9% |
| Net Income | -2.474 | 3.205 | -0.149 | 5.261 | -5.201 | -198.9% |
Balance Sheet
|
|---|
| Cash | 11.967 | 13.073 | 21.677 | 14.211 | 11.439 | -19.5% |
| Short Term Debt | 0.720 | 0.580 | 0.300 | 0.747 | 0.858 | 14.8% |
| Long Term Debt | 3.846 | 3.266 | 2.966 | 12.706 | 12.052 | -5.1% |
Cash flow
|
|---|
| Capex | 0.618 | 0.248 | 0.612 | 14.890 | 2.538 | -83.0% |
Ratios
|
|---|
| Revenue growth | 56.5% | 39.2% | -46.2% | 96.3% | -40.8% | |
| EBITDA growth | -195.7% | 176.6% | -98.4% | 8,976.1% | -150.9% | |
|
|---|
| Gross Margin | 41.2% | 38.9% | 33.9% | 42.8% | 21.3% | -21.5% |
| EBITDA Margin | 7.0% | 13.9% | 0.4% | 19.7% | -16.9% | -36.6% |
| SG&A, % of revenue | 33.9% | 23.0% | 38.3% | 24.2% | 40.4% | 16.2% |
| Net Income Margin | -8.8% | 8.2% | -0.7% | 12.8% | -21.4% | -34.2% |
| CAPEX, % of revenue | 2.2% | 0.6% | 2.9% | 36.2% | 10.4% | -25.8% |
|
|---|
| ROIC | 3.3% | 12.9% | -1.9% | 15.7% | -10.2% | -25.9% |
| ROE | -8.2% | 10.3% | -0.4% | 14.0% | -13.5% | -27.5% |
| Net Debt/EBITDA | -3.8x | -1.7x | -206.7x | -0.1x | |
CVD Equipment Corporation ($CVV) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 9 | 6 | 4 | 5 | | -5.1% | -40.6% | -62.8% | -51.9% |
| EBITDA | 1 | -1 | -3 | -2 | | -38.4% | -154.3% | -222.7% | -179.8% |
| Net Income | 1 | -1 | -3 | -2 | | -45.5% | -205.9% | -279.3% | -221.5% |
Balance Sheet
|
|---|
| Cash | 13 | 15 | 14 | 11 | | -28.5% | -28.3% | -17.4% | -19.5% |
| Short Term Debt | 1 | 1 | 1 | 1 | | 150.2% | 151.4% | 152.6% | 14.8% |
| Long Term Debt | 13 | 12 | 12 | 12 | | 333.8% | 339.6% | 345.6% | -5.1% |
Ratios
|
|---|
| Gross Margin | 41.1% | 17.3% | -1.4% | 7.6% | | -2.1% | -23.4% | -43.9% | -37.4% |
| EBITDA Margin | 12.9% | -17.2% | -63.9% | -34.2% | | -7.0% | -36.1% | -83.2% | -54.9% |
| Net Income Margin | 6.1% | -20.7% | -62.1% | -40.8% | | -4.5% | -32.3% | -75.0% | -57.0% |
Peers in Semiconductor Equipment
Below we provide CVD Equipment Corporation benchmarking against other companies in Semiconductor Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -2.0% | 7.8% | 24.2% | 15.5% |
|---|
| CVD Equipment Corporation ($CVV) | | 39.2% | -46.2% | 96.3% | -40.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.4% | 38.3% | 40.0% | 44.0% | 41.2% |
|---|
| CVD Equipment Corporation ($CVV) | 41.2% | 38.9% | 33.9% | 42.8% | 21.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 6.8% | 9.8% | 12.1% | 16.0% | 16.6% |
|---|
| CVD Equipment Corporation ($CVV) | 7.0% | 13.9% | 0.4% | 19.7% | -16.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.9% | 2.2% | 2.8% | 2.9% |
|---|
| CVD Equipment Corporation ($CVV) | 2.2% | 0.6% | 2.9% | 36.2% | 10.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.5% | 5.2% | 7.6% | 12.2% | 12.1% |
|---|
| CVD Equipment Corporation ($CVV) | 3.3% | 12.9% | -1.9% | 15.7% | -10.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (32 companies) | -1.2x | -1.0x | -1.2x | -0.7x | -1.0x |
|---|
