CVD Stock Up Post Q2 Earnings Despite Revenue Fall, SDC Sale Lifts Cash

Shares of CVD Equipment Corporation CVV have gained 3.3% since the company reported its earnings for the quarter ended June 30, 2026, outperforming the S&P 500 Index’s 0.7% rise over the same period. Over the past month, the stock has rallied 10.2% compared with the S&P 500’s 4.1% increase.

CVD’s Earnings Snapshot

CVD reported second-quarter 2026 revenues from continuing operations of $1.9 million, down 42.6% from $3.4 million a year earlier. Loss from continuing operations was 20 cents per share, compared with 19 cents per share in the prior-year quarter. Including discontinued operations, CVV recorded a net income of $12.6 million, or $1.81 per share, against a net loss of $1.1 million, or 15 cents per share, a year ago, largely reflecting the SDC divestiture.

CVD now operates as a single reportable segment following the sale. By end market, aerospace revenues fell 40.2% to $1.2 million, industrial revenues declined 44.9% to $685,000 and research revenues decreased 49.3% to $113,000. Energy revenue was nil compared with $7,000 a year earlier.

CVV’s Other Key Business Metrics

Second-quarter 2026 orders totaled $1.2 million, down from $1.5 million a year earlier. The latest figure included a $0.8 million PowderCoat 450 system order, with the balance comprising non-system orders. Backlog declined to $3.9 million as of June 30 from $4.6 million as of March 31.

Gross profit fell 31.6% to $329,000 from $481,000, although gross margin improved to 16.8% from 14.1%. Research and development expenses increased 7.2% to $685,000, selling expenses declined 17.7% to $232,000 and general and administrative expenses rose 4.3% to $971,000. Interest income increased 131.7% to $190,000, benefiting from investment of the SDC sale proceeds.

Cash and cash equivalents increased to $23.5 million at quarter-end from $8.7 million as of Dec. 31, 2025, while stockholders’ equity rose to $36 million from $24.7 million. CVV had no long-term debt. Working capital increased to $25.8 million as of June 30, 2026, from $14.1 million as of Dec. 31, 2025. Net cash used in operating activities totaled $1.3 million during the first six months of 2026.

CVD’s Management Commentary

CEO Emmanuel Lakios said that CVV has substantially completed the operational restructuring begun last year, which was intended to align costs with current activity and improve operating efficiency. Management expects the actions to materially lower fixed operating costs.

In aerospace, CVD is installing and commissioning previously shipped equipment and has experienced increased demand for consumables and spare parts, which management said generally carry favorable gross margins. However, the PVT silicon-carbide market remains saturated, and management reported no meaningful commercial development from that business during the quarter.

Factors Influencing CVV’s Headline Numbers

The revenue decline primarily reflected weaker system bookings during 2025 and the first half of 2026, while the higher gross margin resulted from a greater proportion of non-system revenue. Broader economic and geopolitical uncertainty continued to weigh on orders. Management also cited delayed university funding and lingering disruptions related to the government shutdown as impediments to prospective orders. Meanwhile, several newer aerospace products still require installation, commissioning and customer adoption before potentially generating follow-on business.

Management did not provide formal revenue or earnings guidance, citing the nature and size of the business.

CVD’s Other Developments

CVD completed the sale of its SDC division on April 1 for $17.4 million. Net cash proceeds after transaction costs and employee-related liabilities were $15.7 million, with approximately $0.7 million of estimated related income taxes expected to be paid in the third quarter of 2026. The transaction generated a $13.5 million net gain, including first-quarter transaction costs.

CVV retained its Saugerties, NY, facility and leased it to the buyer for an initial two-year term. The company is continuing to evaluate strategic alternatives, including potential sales, divestitures or acquisitions of assets or business lines.

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