CENTRAL ISLIP, N.Y.--CVD Equipment Corporation (NASDAQ:CVV) announced today that it has entered into a contract to purchase a 180,000 square foot facility in Central Islip, NY to serve as headquarters for its CVD Materials Corporation subsidiary. The result of a robust evaluation process including bids and discussions from neighboring states and other locations within New York State and a comprehensive lease vs. buy analysis, the facility was chosen for its proximity, incentives offered, and overall lower capital outlay to establish the capabilities needed to support the anticipated growth of the business.
With a purchase price of $13,850,000 to be financed 75% by a commercial long-term mortgage and with state and local incentive grants, we anticipate closing within ninety (90) days. Until full capacity is needed the Company plans to enter into sub-leasing agreements with third parties for approximately half of the facility. The new facility, a five-minute walk from CVD Equipment’s existing Central Islip headquarters, will provide the manufacturing, engineering, process development, and administration for CVD Materials’ product lines.
In 2016, CVD announced its intention to expand the Company by providing advanced material solutions enabling new and unique applications through CVD Materials Corporation. Since then CVD has focused on i) acquisition (as with the Tantaline® product line and others being considered), ii) internal development (as with carbon composite and electronic materials), and iii) working in conjunction with customers to create the capabilities to provide a range of advanced high-performance materials. For the materials and the equipment needed, CVD will leverage its intellectual property, knowhow, and strengths in equipment design, manufacturing, and process development for cost-efficient high value production processes for growth applications. While not a significant component to revenue in 2017, CVD anticipates growth in the second half of 2018.
In December of 2016 CVD acquired the assets of Tantaline in Nordberg, Denmark. Tantaline CVD currently provides corrosion resistant Tantalum coatings on stainless steel and other metals to enhance their corrosion resistant properties and starting in mid-2018, Tantaline CVD will begin to provide this service for the North American continent in our new materials facility. The deposition equipment being manufactured by CVD for the new facility will allow processing of larger parts and further development of corrosion and wear resistant coatings for unique applications.
Additionally, CVD is pleased to announce that orders have been received for carbon composite material for a medical application and another for a substrate material to be used in the electronics industry. The equipment for both unique applications is being developed and manufactured by CVD Equipment and will be used in the new materials facility.
Leonard Rosenbaum, President of CVD Equipment Corporation, stated, “The new facility for CVD Materials will help diversify our corporate product offerings and provide for less cyclicality in order levels. Using equipment designed and manufactured by CVD Equipment Corporation and building on our growing expertise in material processing will give us a significant advantage in meeting the cost, quality and time to market requirements that are expected by our customers. This expansion will accelerate the commercialization of tomorrow's technology and further our ‘Sustainable Growth with Low Risk’ business strategy at CVD Materials.”
About CVD Equipment Corporation
CVD Equipment Corporation (NASDAQ: CVV) designs, develops, and manufactures a broad range of chemical vapor deposition, gas control, and other state-of-the-art equipment and process solutions used to develop and manufacture materials and coatings for research and industrial applications. This equipment is used by our customers to research, design, and manufacture these materials or coatings for aerospace engine components, medical implants, semiconductors, solar cells, smart glass, carbon nanotubes, nanowires, LEDs, MEMS, and other applications. Through our application laboratory, we provide process development support and process startup assistance with the focus on enabling tomorrow’s technologies™. Its wholly owned subsidiary CVD Materials Corporation provides advanced materials and metal surface treatments and coatings to serve demanding applications in the electronic, biomedical, petroleum, pharmaceutical, and many other industrial markets.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by CVD Equipment Corporation) contains statements that are forward-looking. All statements other than statements of historical fact are hereby identified as “forward-looking statements, “as such term is defined in Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward looking information involves a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, among other factors, conditions, success of CVD Equipment Corporation’s growth and sales strategies, the possibility of customer changes in delivery schedules, cancellation of orders, potential delays in product shipments, delays in obtaining inventory parts from suppliers and failure to satisfy customer acceptance requirements.