Greetings, and welcome to the CVD Equipment Corporation Third Quarter 2019 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It’s my pleasure to introduce your host, Len Rosenbaum. Please go ahead, sir.

Good afternoon, everyone and thank you for joining our earnings call. The company’s focus during the third quarter was on getting our materials facility up and running, starting on MesoScribe facility backup after moving from California to New York and three pursuing additional equipment sales. The company has invested $2.5 million during 2018 in building improvements, machinery and other expenses related to CVD Materials, and $2.1 million in the first nine months of 2019. I’m glad to say, MesoScribe is now operating and Tantaline’s equipping continues to be installed and tested. We have continued to increase our marketing efforts for equipment and materials sales. We are now showcasing our material facility operations and offering material coating services to new and existing customers. The expanded material operations will enhance our capabilities in providing corrosion resistant coatings through Tantaline for medical, pharma, oil and gas applications; sensors through MesoScribe for defense, aerospace and turbine applications; and through our CVD Materials subsidiary for carbon composite materials, medical coatings, electronic substrate materials and further expansion into other coatings for defense, aerospace and industrial applications. We have continued working on our fluid reactor technology and additional testing will be done this quarter with the Center of Biotechnology at Stony Brook University to further our novel patent pending technology on an improved extracorporeal membrane oxygenation device. We anticipate further collaboration for this promising technology and application. During the fourth quarter, Tantaline U.S. manufacturing should start being operational and we will continue working on further improvement in both equipment and material sales. We anticipate the high margin growth markets in materials for corrosion resistance, medical, aerospace and defense coatings will help flatten the uneven levels of our equipment sales. We will continue to monitor orders and expenditures and we remain committed to returning to profitable quarterly results. With that, I would like to turn the call over to our CFO, Tom McNeill.

Thank you, Len. In the third quarter, our revenue was $5.7 million as compared to $4 million in third quarter 2018, an increase of $1.7 million or 41.6%. And our net loss was $138,000 or $0.02 per diluted share as compared to a net loss of $2.5 million or $0.39 per diluted share in the third quarter 2018. Our nine month revenues were $14.1 million as compared to $19.6 million in 2018 a decrease of $5.5 million or 28.1%. And our net loss was $3.7 million or $0.57 diluted share as compared to a net loss of $3.3 million or $0.51 per diluted share in the first nine months of 2018. Our revenue increase of $1.7 million in this third quarter as compared to the year ago period was primarily the result of increases in spare parts and equipment sales. For the nine months of 2019 the revenue decrease of $5.5 million was primarily attributable to the completion of large equipment orders and not being able to replace them in a timely fashion. Our sequential quarterly revenue increased $800,000 in the third quarter to $5.7 million, which is an increase of 16%, and it was our second sequential quarterly revenue increase of $1.5 million – Q2 or Q1 of $1.5 million or 41.8%. With respect to new orders, during the third quarter, we received orders of approximately $7.9 million, as compared to $3.3 million in Q2 and $6.5 million in Q1 of 2019. This lifted order backlog, which at September 30 was $6.7 million as compared to $4.5 million at June 30, an increase of $2.2 million or 49%. With respect to our gross profit margin percent, we improved to 25% this quarter, as compared to 10% in the second quarter of 2019, and negative 11% in the first quarter…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Brett Reiss with Janney Montgomery Scott. Your line is now live.

Hi, Len. Hi, Tom. How are you? The bookings of $7.9 million, is it all legacy business or is there a component of the MesoScribe and the Tantaline new material handling business embedded in that?

There is some of both embedded in that number.

Can you share what that is or you don’t want to break that out?

What I could tell you is the $7.9 million is appreciably equipment sales, parts, service, et cetera, SDC. There is a component of it with materials, but primarily it’s the core business as we exist today.

Okay. Now the Tantaline new business, your potential new customers are in various sectors of the economy, oil service, medical products, is the time for these different businesses to make a decision to use Tantalite, does it vary from industry to industry?

I’m sure it will vary from industry to industry and also from customer to customer. And I’m not overly concerned. The first six months or a year, we’ll be getting out a lot of product to, let’s say, existing customers that have used it, and also to new customers for them to try it.

So when the Tantaline operations are fully operational in the new facility in the fourth quarter, order flow for Tantaline can start pretty much immediately?

Well, they won’t be fully operational in the fourth quarter. They’ll start to be operational in the fourth quarter. It will take us probably most of the first half of next year to get everything fully operational. We got more than one system going in.

Right, right, right. Now Len, I dropped in and I saw your booth at the Javits Center, where you were – you had your Tantaline offerings and I observed good traffic, the people manning the booth were – I’m a salesman. They’re very good at what they were doing and interacting with people, but do you get a sense that these were people that you reached out to at Javits, that are just kind of curious and testing the waters? Or do you get a sense there’s going to be real order flow from that kind of marketing that you did?

We wouldn’t be investing the way we are if we didn’t feel there was a real business behind this. The Jacob Javits Center is only one aspect of how we’re trying to get out there and market the products. There are others, trade shows we go to, there are samples that we sent to customers, there’s salespeople out there that are doing the selling for us. So it’s more than one – just the Jacob Javits Center. Excuse me.

Are you finished with all your cost containment or is there room for further reductions? And can you quantify what that might be?

Yes, Brett. I think we’re – it never ends. I think you’re always looking at everything from how can we do it better, faster, more efficiently, number one. And then two, we’re constantly looking at our resources as we build out and balance with new orders related to the materials side. So like any other company out there. It’s just – it’s a never-ending process. You’re always looking.

Right, right. If volumes in business returns at a robust level, the cost-cutting that you’ve done, have you basically trimmed fat, but you didn’t have to eat into bone that might impact you being able to service the additional revenues that might come in?

Well, we never look to reduce personnel that are very beneficial to the company. Hopefully, we’ll announce additional hirings as the orders keep going up.

Okay. And I think there was a release that the tenant that you have in – gave back half the space. Are you vigorously attempting to find a replacement tenant?

Yes. We – the tenant’s out at the end of the year, December 31, and our broker has it. He’s pursuing it. And just like we – reasonably quickly, we’re able to get both spaces. You can never be quite sure when you’re going to get that right tenant to fill it in, but it’s a very desirable space, high ceilings. And again, Brett, this is just a component of the overall picture, it helps lower costs, but it’s – we have a broker doing it. It’s not our focus.

Thank you. Our next question is coming from Martin Howard, a Private Investor. Your line is now live.

Hi. I feel like – Moses was in the desert for 40 years, we’ve been in a sort of a quasi-desert for two or three. I hope we’re getting out of it. And we were hoping what, five years ago that we’d be doing $100 million. Obviously, we’re not going to do that. But Meso thing – that sounds so sexy when you bought it, and the guy came to the annual meeting and talked about it. Does that have the potential of being a $5 million, $10 million, $20 million division in say in three, four, five years?

The answer to that is outright yes, okay. We would not have pursued it otherwise.

Okay. That’s good. So when will we see if it’s going to be $5 million or something like that in three or four years? When will we see a number that you can – you don’t need glasses to see?

Well, right now, it’s merged in with the materials operations, and hopefully, you’ll see the materials numbers going up.

Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments. [Operator Instructions] I will now turn the floor back over to management for any further or closing comments.

Thank you, everyone, for joining the earnings call, and I look forward to speaking to you next quarter. Thank you.

Thank you. That does conclude today’s teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.