<PAGE> 1
US SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended 3-31-98
( ) TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF THE EXCHANGE ACT
For the transition period from _____________to______________
Commission file number_____________________________________
CVD EQUIPMENT CORPORATION
(Exact name of small business issuer as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
11-2621692
(IRS Employer Identification Number)
1881 LAKELAND AVENUE, RONKONKOMA, NY 11779
(Address of principal executive offices)
516-981-7081
(Issuers Telephone Number)
(Former name, former address, and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by section 13 or 15 (d) of the Exchange Act during the past
12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15 (d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
2,918,750 SHARES OF COMMON STOCK, $.01 PAR VALUE AS OF 3-31-98
<PAGE> 2
CVD EQUIPMENT CORPORATION
BALANCE SHEET
ASSETS
MARCH 31,1998
<TABLE>
<CAPTION>
MARCH 31
1998
----------
<S> <C>
CURRENT ASSETS:
CASH $2,224,202
ACCOUNTS RECEIVABLE 326,256
COST IN EXCESS OF BILLINGS 809,053
INVENTORIES 89,045
DEFFERED TAXES 197,334
OTHER CURRENT ASSETS 48,052
TOTAL CURRENT ASSETS 3,693,942
----------
PROPERTY, PLANT, & EQUIPMENT 327,310
AT COST & NET OF ACCUMULATED DEPRECIATION
OTHER ASSETS:
LOAN RECEIVABLE-OFFICER -
OTHER 109,909
----------
TOTAL OTHER ASSETS 109,909
TOTAL ASSETS 4,131,161
==========
</TABLE>
<PAGE> 3
CVD EQUIPMENT CORPORATION
BALANCE SHEET
LIABILTIES & STOCKHOLDER'S EQUITY
MARCH 31,1998
<TABLE>
<CAPTION>
MARCH 31
1998
----------
<S> <C>
CURRENT LIABILTIES:
NOTES PAYABLE $ -
CURRENT MATURITIES OF LONG TERM DEBT 4,575
ACCOUNTS PAYABLE 160,935
BILLINGS IN EXCESS OF COST -
OTHER CURRENT LIABILITIES 155,405
----------
TOTAL CURRENT LIABILITIES 320,915
LONG TERM DEBT 20,750
----------
TOTAL LIABILTIES 341,665
STOCKHOLDERS EQUITY
COMMON STOCK - $.01 PAR
AUTHORIZED 10,000,000 SHARES
ISSUED & OUTSTANDING 2,918,750 SHARES 29,188
ADDITIONAL PAID-IN CAPITAL 2,784,060
RETAINED EARNINGS 976,248
----------
TOTAL EQUITY 3,789,496
TOTAL LIABILTIES & EQUITY 4,131,161
==========
</TABLE>
<PAGE> 4
CVD EQUIPMENT CORPORATION
STATEMENT OF INCOME & RETAINED EARNINGS
MARCH 31,1998
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1998 1997
---------- ----------
<S> <C> <C>
REVENUES
REVENUE ON COMPLETED CONTRACTS $ 215,462 $ 83,967
REVENUE ON UNCOMPLETED CONTRACTS 666,119 1,022,864
---------- ----------
TOTAL REVENUE 881,581 1,106,831
COST OF GOODS SOLD 607,201 705,065
---------- ----------
GROSS PROFIT 274,380 401,766
OPERATING EXPENSES
SELLING AND SHIPPING 43,109 37,874
GENERAL AND ADMINISTRATIVE 198,408 165,691
---------- ----------
TOTAL OPERATING EXPENSE 241,517 203,565
INCOME BEFORE INTEREST AND OTHER EXPENSES 32,863 198,201
OTHER INCOME (EXPENSE)
INTEREST INCOME 14,844 10,287
INTEREST EXPENSE (251) (2,776)
OTHER INCOME 500 553
GAIN ON SALE OF FIXED ASSET 164,442 -
---------- ----------
TOTAL OTHER INCOME 179,535 8,064
INCOME BEFORE TAXES 212,398 206,265
INCOME TAX BENEFIT (PROVISION) (53,302) (550)
---------- ----------
NET INCOME 159,096 205,715
RETAINED EARNINGS AT BEGINNING 817,152 183,245
RETAINED EARNINGS AT END $ 976,248 $ 388,960
========== ==========
NET INCOME PER SHARE
$ 0.05 $ 0.07
0.05 0.07
WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 2,918,750 2,918,750
========== ==========
</TABLE>
<PAGE> 5
CVD EQUIPMENT CORPORATION
STATEMENT OF INCOME & RETAINED EARNINGS
MARCH 31,1998
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITES:
NET INCOME $ 159,096 $ 205,715
GAIN ON SALE OF FIXED ASSET (164,442) -
DEPRECIATION 28,539 31,295
DEFERRED TAX BENEFIT - -
(INCREASE) DECREASE IN:
ACCOUNTS RECEIVABLES 67,809 121,064
COST IN EXCESS OF BILLINGS 581,969 (102,822)
INVENTORIES 46,762 (43,618)
OTH CURRENT ASSETS 54,305 (4,541)
OTHER ASSETS (12,844) 1,566
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE 64,623 37,178
BILLINGS IN EXCESS OF COST - (22,946)
OTH CURRENT LIABILITIES (3,812) (56,055)
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 822,005 166,836
CASH FLOWS FROM INVESTING ACTIVITES:
OFFICER LOAN RECEIVABLE 507,888 (5,740)
CAPITAL EXPENDITURES (85,873) (10,381)
PROCEEDS FROM SALE OF FIXED ASSET 715,381 -
---------- ----------
NET CASH USED IN INVESTING ACTIVITES 1,137,396 (16,121)
CASH FLOWS FROM FINANCING ACTIVITES:
INCREASE (DECREASE) IN:
NOTES PAYABLE - -
DEBT-CURRENT 4,575 (37,384)
DEBT-LONG TERM 20,750 -
---------- ----------
NET CASH USED IN FINANCING ACTIVITES 25,325 (37,384)
---------- ----------
NET INCREASE (DECREASE) IN CASH 1,984,726 113,331
CASH AT BEGINNING OF PERIOD 239,476 67,212
CASH AT END OF PERIOD 2,224,202 180,543
</TABLE>
<PAGE> 6
CVD EQUIPMENT CORPORATION
NOTE TO FINANCIAL STATEMENTS
MARCH 31, 1998
BASIS OF FINANCIAL STATEMENTS
The financial data is subject to year end audit and does not claim
to be a complete presentation since note disclosure under generally
accepted accounting procedures is not included. Note disclosures
required under generally accepted accounting procedures are included
in the Company's audited financial statements filed as part of Form
10-KSB for the year ended December 31, 1997. Form 10-QSB should be
read in conjunction with these financial statements.
The results of operations for the three months are not necessarily
indicative of those for the full year. In the opinion of management,
the accompanying unaudited financial statements contain all adjustments
necessary to fairly present the financial position and the results of
operation for the periods indicated.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL OPERATIONS
CONDITIONS AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
Revenue for the first quarter of 1998 was $881,581. This is a decrease
of 20% when compared to the first quarter of 1997. Gross profit for the
first quarter of 1998 is 31% versus 36% in the comparable period one year
ago. A substantial portion of the increase in the cost of goods sold is
payroll expense.
Selling and G & A expense are higher for the first quarter when compared
with last year. For 1998, there was $241,517 expensed to these accounts
versus $203,565 in 1997. Of this $38,000 increase, $16,000 is attributed
to commissions and $8,000 to investor relations' expense.
Total other income is higher for the first quarter when compared with
last year. For 1998, there was $179,535 booked to the accounts versus
$8,064 in 1997. This $171,000 increase is attributed mainly to the sale
of the vacant land CVD owned in Selden, New York.
Liquidity
CVD's cash position increased by $2.0 million for the quarter. This was
mainly attributed to $715,000 proceeds from the sale of the vacant land
it owned in Selden, New York, $508,000 proceeds by full payment of
Officers Loan Receivable, and $989,000 received by an 80% progress payment
on a job which is 99% complete.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
CVD EQUIPMENT CORPORATION
(Registrant)
/s/ LEONARD A. ROSENBAUM
-------------------------------
Leonard A. Rosenbaum
President, CEO
/s/ SHARON CANESE
-------------------------------
Sharon Canese
Chief Financial Officer
Date: April 30, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,224,202
<SECURITIES> 0
<RECEIVABLES> 1,135,309
<ALLOWANCES> 0
<INVENTORY> 89,045
<CURRENT-ASSETS> 3,693,942
<PP&E> 1,635,962
<DEPRECIATION> 1,308,652
<TOTAL-ASSETS> 4,131,161
<CURRENT-LIABILITIES> 320,915
<BONDS> 0
0
0
<COMMON> 2,813,248
<OTHER-SE> 976,248
<TOTAL-LIABILITY-AND-EQUITY> 4,131,161
<SALES> 215,462
<TOTAL-REVENUES> 881,581
<CGS> 607,201
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 241,517
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 251
<INCOME-PRETAX> 212,398
<INCOME-TAX> 53,302
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 159,096
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
