Gross profit margin for year-end 2008 is 29.6% compared to 34.4% for year 2007. The decrease is attributable to an increase in engineering and production personnel necessary to support increased order levels, the expansion of the company’s Application Laboratory and new product development costs in the Nanomaterials, Smart Glass, Solar and Semiconductor fields.
The company’s decision to focus on the CVD/First Nano product lines for long-term revenue growth and profitability is proving to be successful. Annual revenue posted by the CVD/First Nano division for custom Chemical Vapor Deposition and EasyTube products increased over 2007 by about 33.5% and ended 2008 with highest backlog ever due to the CVD/First Nano products.
At December 31, 2008, CVD Equipment’s order backlog, which is comprised of customer orders that are expected to ship within the next two years, increased by 200% to $15,271,000 compared to $5,087,000 at December 31, 2007 which was a 42.7% increase over December 31, 2006 backlog of $3,565,000. This is a result of record breaking sales orders for the current year of $28,944,000 compared to last year’s orders of $14,418,000, an increase of 101%. The company has continued to experience in 2008, a strong demand for both, custom Chemical Vapor Deposition and EasyTube products. The company has also introduced and received initial order for a high volume manufacturing system incorporating the company’s patent pending proprietary solutions. The backlog at any specific point in time however, is not necessarily indicative of actual revenues or earnings for any succeeding period due to possible customer changes in delivery schedules, cancellation of orders, and because backlog does not provide any assurance of a profit from those orders.
Leonard Rosenbaum, president and chief executive officer said, “In 2007 we started to expand our research, engineering, process development and manufacturing capability. With the additional funds raised by a completed public stock offering in the 4th quarter of 2007, we were able to continue implementing our plan for a significant company expansion. In January 2008, we purchased an additional building where we relocated our Application Laboratory in the 2nd quarter of 2008. In addition to the Application Laboratory expansion, we are introducing additional EasyTube™ equipment platforms to capture a larger portion of the multi-billion dollar Research and Development money that is spent each year. Our EasyTube™ product line has been widely accepted and is serving University and Research Laboratories, startup companies and quality control departments throughout the world in fields such as Nanotubes (Carbon and Boron Nitride), Graphene, Nanowires (Zinc Oxide, Gallium Nitride, Silicon,) Solar Cells, MEM’s, Energy, Semiconductors and Light Emitting Diodes. The new Application Laboratory allows expansion of our in-house research and the further implementation of our business plan to offer Nano and Solar Company’s assistance in accelerating the commercialization of their next generation of products on CVD production equipment platforms. We have developed and filed patent protection for some of our own proprietary system and process solutions which have the potential to be sold to multiple customers for the volume manufacturing requirements in the energy generation (photovoltaic) and energy savings (smart windows) fields.”
“We anticipate 2009 will continue to be a year of increasing revenues in our traditional CVD/First Nano business field even in the current economic climate and that our proprietary, patent pending solutions will provide additional growth after demonstration in our Application Laboratory.”
