Cemtrex Inc News - CETX

$CETX News: Cemtrex Reports Second Quarter 2024 Financial Results

Q2’24 Revenue Increased 7% to $17.2M; Management to Host Conference Call Today at 5:00 p.m. ET

Hauppauge, NY, May 14, 2024 (GLOBE NEWSWIRE) -- - Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, has reported its unaudited financial and operational results for the fiscal second quarter ended March 31, 2024.

Key Second Quarter FY 2024 and Subsequent Highlights

Revenue for Q2’24 increased 7% to $17.2 million, compared to revenue of $16.1 million for Q2’23. Security segment revenues decreased 18% to $8.1 million in Q2’24 due to the delay of certain projects for the segment’s products and services.Industrial Services segment revenues for Q2’24 increased 47% to $9.1 million, on increased demand and additional revenue from the Heisey Mechanical acquisition completed in Q4’23.
Security segment revenues for the six months ended March 31, 2024, increased 2% to $17.3 million compared to $16.9 million for the six months ended March 31, 2023. This increase was due to an increased demand for the Security segment’s products and services.
Industrial Services segment revenues for the six months ended March 31, 2024, increased 51%, to $16.8 million compared to $11.1 million for the six months ended March 31, 2023.
Closed $10 million upsized underwritten public offering to conduct operations, increase marketing efforts, invest in existing business initiatives and products, and for the partial repayment of indebtedness.
Cash, cash equivalents and restricted cash as of March 31, 2024 was $4.1 million.

Management Commentary

Cemtrex Chairman and CEO, Saagar Govil, commented on the results: “The second quarter was highlighted by new technology deployments and continued overall growth in our business. Revenue in the quarter grew 7% to $17.2 million, driven by strong demand for AIS products and services, with Industrial Services segment revenue increasing 47% to $9.1 million. For Vicon, although the quarter was affected by the delay of some of its projects, for the half fiscal year the segment is still growing year over year. Operating loss for the second quarter was $1.0 million, compared to operating income of $0.4 million a year ago, mainly due to decreased gross profit in our Security segment and increased payroll expenses. The operating loss for the six month period was $1.8 million compared to $1.5 million a year ago, despite the higher sales. However, these results include approximately $1 million in one-time expenses from employee related charges and legal expenses that we do not anticipate incurring in the future. Our goal of reaching a full year operating profit remains and we are working hard to drive revenue and maintain tight cost controls.

“Turning to our Security segment, Vicon continued to push the deployment of new technologies and products, including its innovative new cloud security platform Anavio. The platform enables users to manage their access control, video, and intercom via a single tool, so there’s no shuffling between separate security systems in order to achieve complete situational awareness and control. New features include face authentication that ensures only authorized people can access facilities, and a powerful ‘person of interest’ feature, whereby users can forensically track a specific person (or people) throughout a facility. We continue to make investments into our sales and marketing resources in the segment to drive further sales over the next several quarters. We also were able to reduce our inventory by over $1 million of this fiscal year as we strive to make our operations more efficient. With the launch of Anavio along with new technologies and continued improvements to our core software platform Valerus, we expect to drive further growth and see additional opportunity to grow gross margin in 2024.

“AIS and our Industrial services segment captured new orders from leading companies, building a pipeline of growth that we believe will produce a record year of revenue. We continue to believe with additional orders ahead, AIS has the potential to reach more than 30% annual revenue growth in FY’24. During the quarter AIS secured orders including a $1.6 million order for two relocation projects from a leading printing and graphics company, and a $0.5 million order to remove existing equipment for an engineering and construction company, affirm AIS’ commitment to delivering excellence across its service offerings.

“Looking ahead, strengthened by an improved balance sheet from our $10 million upsized underwritten public offering, of which a portion of the proceeds were used to pay off some of our indebtedness, we are well positioned to build on our momentum and remain focused on our goal to achieve positive operating income in fiscal year 2024 on a full year basis. We continue to explore acquisition opportunities that can enhance our market reach and service capabilities, and further drive growth in the months and years ahead,” concluded Govil.

Second Quarter FY 2024 Financial Results

Revenue for the three months ended March 31, 2024, and 2023 was $17.2 million and $16.1 million, respectively, an increase of 7%. The Security segment revenues for the three months ended March 31, 2024, decreased by 18% to $8.1 million. The Security segment decrease was due to the delay of multiple projects for the Security segment’s products and services. The Industrial Services segment revenues for the second quarter increased by 47% to $9.1 million, mainly due to increased demand for the segment’s services as well as additional business from the Heisey acquisition completed during the fourth quarter of fiscal year 2023.

Gross Profit for the three months ended March 31, 2024, was $6.9 million, or 40% of revenues, as compared to gross profit of $7.3 million, or 46% of revenues, for the three months ended March 31, 2023.

Total operating expenses for three months ended December 31, 2023, were $8.0 million, compared to $7.0 million in the prior year’s quarter.

Operating loss for the second quarter of 2024 was $1.0 million as compared to an operating income of $0.4 million for the second quarter of 2023. The operating loss was primarily due to a decrease in gross profit in the Security segment and overall increased payroll expenses.

Net loss for the quarter ended March 31, 2024 was $1.6 million, as compared to a net loss of $0.5 million in 2023.

Cash, cash equivalents and restricted cash totaled $4.1 million at March 31, 2024, as compared to $6.3 million at September 30, 2023.

Inventories decreased to $7.4 million at March 31, 2024, from $8.7 million at September 30, 2023.

Second Quarter FY 2024 Results Conference Call

Cemtrex Chief Executive Officer Saagar Govil and Chief Financial Officer Paul Wyckoff will host the conference call, followed by a question-and-answer period.

To access the call, please use the following information:

Date: Tuesday, May 14, 2024
Time: 5:00 p.m. Eastern time, 2:00 p.m. Pacific time
Toll-free dial-in number: 1-800-717-1738
International dial-in number: 1-646-307-1865
Conference ID: 1182838
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact MZ Group at 1-949-491-8235.

The conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1668765&tp_key=084fe1071c and via the investor relations section of the Company's website at http://www.cemtrex.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time through May 28, 2024.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 1182838
About Cemtrex

Cemtrex Inc. (CETX) is a company that owns two operating subsidiaries: Vicon Industries Inc and Advanced Industrial Services Inc.

Vicon Industries, a subsidiary of Cemtrex Inc., is a global leader in advanced security and surveillance technology to safeguard businesses, schools, municipalities, hospitals and cities. Since 1967, Vicon delivers mission-critical security surveillance systems, specializing in engineering complete security solutions that simplify deployment, operation and ongoing maintenance. Vicon provides security solutions for some of the largest municipalities and businesses in the U.S. and around the world, offering a wide range of cutting-edge and compliant security technologies, from AI-driven video analytics to fully integrated access control solutions. For more information visit www.vicon-security.com

AIS – Advanced Industrial Services, a subsidiary of Cemtrex, Inc., is a premier provider of industrial contracting services including millwrighting, rigging, piping, electrical, welding. AIS Installs high precision equipment in a wide variety of industrial markets including automotive, printing & graphics, industrial automation, packaging, and chemicals. AIS owns and operates a modern fleet of custom designed specialty equipment to assure safe and quick installation of your production equipment. Our talented staff participates in recurring instructional training, provided to ensure that the most current industry methods are being utilized to provide an efficient and safe working environment. For more information visit http://www.ais-york.com

For more information visit http://www.cemtrex.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the closing of the offering, gross proceeds from the offering, our new product offerings, expected use of proceeds, or any proposed fundraising activities. These forward-looking statements are based on management’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward looking statements. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. These risks and uncertainties are discussed under the heading “Risk Factors” contained in our Form 10-K filed with the Securities and Exchange Commission. All information in this press release is as of the date of the release and we undertake no duty to update this information unless required by law.

$CETX News: Cemtrex Issues Shareholder Letter and Provides Corporate Update

Completed Restructuring in 2023 Now Positions AIS and Vicon Segments for Continued Revenue Growth and Expanded Operating Profitability

Brooklyn, NY, Feb. 28, 2024 (GLOBE NEWSWIRE) -- - Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, today issued a letter to shareholders from Chairman and CEO Saagar Govil.

To the Shareholders of Cemtrex, Inc.,

I wanted to provide you with a detailed update on Cemtrex’s activities over the last several months. If you have been following our progress closely then you will know that we have made many changes to our organization with the hope that we will generate attractive returns for all of you as we go forward. I also wanted to take this opportunity to talk a little bit more in depth about our Company in a way that might provide additional insight into why management has made some of the decisions we have, and how management views the current opportunities in our portfolio.

Over the last five years we have made a number of different investments. Some have proven to be quite fruitful while others, unfortunately, have not led to great results. We cannot change the missteps we have taken, but we have certainly learned from them and learned how to avoid them in the future. While we remain bullish in the emerging opportunities that Cemtrex invested in over the last five years, like Virtual Reality and SmartDesk, it became readily apparent that we could not effectively drive the best outcomes with these long-term investments due to the enormous cash requirements and operating losses that would be required to see these through. Private companies have certain luxuries that public companies do not have when it comes to building startups, particularly in rising interest rate environments. As a result, we made the difficult but ultimately correct decision to exit these businesses.

Looking ahead, we can confidently say that the path we are on today is clearer than ever, with the highest assurance of success that we have had since the Company’s inception. But what does success mean? For us, a company over the long term should be able to generate a higher return with its cash than would be possible by investing it in the S&P 500 index. Everything starts with this fundamental premise. Sadly, today there are many public companies that do not meet this test, including ours in recent years. Over the last ten years, despite making several smart decisions, we made some unforced errors which resulted in relinquishing any positive returns in our common stock that could have been realized. However, despite these setbacks we remain well poised for a positive turnaround on this front. Based on the numerous changes over the last twenty four months and restructuring of our business that we undertook in November of 2022, I am confident that we are on the right track to start consistently driving above average returns. Let’s dive into why that is the case:

With the restructuring completed Cemtrex owns two great businesses: Vicon Industries, Inc. (“Vicon”) which comprises our Security segment, and Advanced Industrial Services, Inc. (“AIS”) which comprises our Industrial segment.

When we make an investment, we primarily look at two measures of capital return efficiency. The first is with respect to our investment. What is the cash-on-cash return of the investment over its life compared to the S&P 500? Additionally, we look at, on an annual basis, what is the Annual Net Income against the starting FY Shareholder’s Equity in the business?

We acquired AIS during our FY 2016 for a total purchase price of $7,500,000. Out of that purchase price, Cemtrex contributed $1,000,000 of equity, which was paid in the form of Cemtrex stock. The balance of the purchase price was financed through debt. Looking at the Net Income of the business, excluding the unusual benefits of COVID-19 relief programs like PPP that took place in 2021, the cumulative return on that investment over the eight years we have owned AIS has been $8,628,084 or 863%. When that cumulative return is averaged over the 8 years ownership it represents a 108% annual return on Cemtrex’s invested capital.

Furthermore, when we look at our second measure for this business, the annual return on equity, we see additional encouraging results. The annual return on beginning shareholder’s equity for AIS, on average, over the last 8 years, again excluding PPP benefits in 2021, has been approximately 35%. This important measure encourages management to continue investing its equity into this business to drive outsized returns. Additional factors that make AIS an attractive business are: 1) approximately 70% of our sales come from repeat customers we do business with; 2) attractive 30%+ gross margins that we see further opportunity to drive higher as we grow the business; 3) the macro-economic factors in the U.S. that are driving growth, including increased infrastructure spending and reshoring of manufacturing.

For FY 2023, AIS produced strong results, with sales reaching $25 million compared to $21.2 million for the prior year, an increase of 18%. Additionally, operating income increased from $.6 million in FY 2022 to $3.1 million in FY 2023, representing a 400% increase in operating earnings for the period.

Regarding our Security segment, let’s focus on our investment in Vicon of which we own 95%. Cemtrex has invested approximately $22.95 million of its own cash into Vicon, as debt and equity, to date over the five years of ownership, including the cost of acquiring the shares of the business as well as additional investments made into the company to grow it. At the time our initial investment was made the market cap of the company was approximately $5.5 million. Today, with the company doing $34.7 million in annual revenue and three sequential quarters of operating profit in FY 2023, we can conservatively estimate the enterprise value of Vicon to be substantially higher than when we made our investment and our return on equity, when annualized over the 5 years of ownership, far exceeds the competing return on the S&P 500.

In FY 2023, Vicon produced significantly better results, with sales growing from $23.8 million in FY 2022 to $34.7 million in FY 2023, an increase of 46%. Gross Profit improved from $8.5 million in FY 2022 to $15.6 million in FY 2023, an increase of 85%. The operating loss at Vicon was reduced from $6.1 million in FY 2022 to $0.6 million in FY 2023, a reduction of 92%, and the Company has had an operating profit three of the last four quarters.

The exciting part is that we believe relative to our current investment, limited additional capital, if any, will be required on Cemtrex’s behalf to drive further growth at Vicon. Based on the continued opportunity for growth, we believe that Vicon has tremendous potential to increase its enterprise value over the next five years that would maintain or exceed the annual return on our capital. This will be accomplished primarily by driving further topline growth, increasing operating profits, and scaling Annual Recurring Revenue (“ARR”) products that we believe can drive multiple expansion.

In our segment reporting we now carve out our Corporate costs, essentially the costs to manage these portfolio companies and the costs of being a public company, as a separate segment so that it is easier for our shareholders to better ascertain the underlying performance of the businesses we own. The Corporate costs today reduce our operating income meaningfully, but as we scale the business these costs will continue to remain at low levels relative to our earnings.

As legendary investor Peter Lynch said, “Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100% correlation between the success of a company and the success of its stock.” Our goal going forward is to leverage our capital in a way to drive excellent operating results and thus deliver exceptional returns on our investments over time. We remain confident that as we stay on this path the consistent results in the business will begin to be reflected in our stock.

All the above certainly doesn’t summarize all the accomplishments that have taken place within our Company this past year. We have added a number of talented employees, restructured some of our debt to give us greater flexibility for growth, completed an important acquisition at AIS, and launched several exciting products at Vicon that will set it on a path for long term success for years to come. We feel, based on the results above, that FY 2023 represents a key turning point for us, as we have a renewed focus, clarity, and resolve to deliver exceptional results going forward.

Sincerely,

Saagar Govil
Chairman and Chief Executive Officer

About Cemtrex

Cemtrex Inc. (CETX) is a company that owns two operating subsidiaries: Vicon Industries Inc and Advanced Industrial Services Inc.

Vicon Industries, a subsidiary of Cemtrex Inc., is a global leader in advanced security and surveillance technology to safeguard businesses, schools, municipalities, hospitals and cities. Since 1967, Vicon delivers mission-critical security surveillance systems, specializing in engineering complete security solutions that simplify deployment, operation and ongoing maintenance. Vicon provides security solutions for some of the largest municipalities and businesses in the U.S. and around the world, offering a wide range of cutting-edge and compliant security technologies, from AI-driven video analytics to fully integrated access control solutions. For more information visit www.vicon-security.com

AIS – Advanced Industrial Services, a subsidiary of Cemtrex, Inc., is a premier provider of industrial contracting services including millwrighting, rigging, piping, electrical, welding. AIS Installs high precision equipment in a wide variety of industrial markets including automotive, printing & graphics, industrial automation, packaging, and chemicals. AIS owns and operates a modern fleet of custom designed specialty equipment to assure safe and quick installation of your production equipment. Our talented staff participates in recurring instructional training, provided to ensure that the most current industry methods are being utilized to provide an efficient and safe working environment. For more information visit www.ais-york.com

For more information visit http://www.cemtrex.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the closing of the offering, gross proceeds from the offering, our new product offerings, expected use of proceeds, or any proposed fundraising activities. These forward-looking statements are based on management’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward looking statements. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. These risks and uncertainties are discussed under the heading “Risk Factors” contained in our Form 10-K filed with the Securities and Exchange Commission. All information in this press release is as of the date of the release and we undertake no duty to update this information unless required by law.

https://www.globenewswire.com/newsroom/ti?nf=OTA1NDkzNyM2MTEyMTUwIzIwNDk3MDg=
https://ml.globenewswire.com/media/YmVkYTQxMGItNDhhMy00MjFhLWJhMTEtZDM5MzJhMmQzNjcwLTEwNjEyNzk=/tiny/Cemtrex-Inc-.png
Investor Relations
Chris Tyson
Executive Vice President – MZ North America
Direct: 949-491-8235

CETX@mzgroup.us
www.mzgroup.us

Source: Cemtrex Inc.

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

Cemtrex Inc (CETX)

Real-time discussions and trading ideas: Trade with confidence with our powerful platform.

CETX News

Vicon Boosts its Unified VMS Platform by Integrating with Omnilert's AI Visual Gun Detection System

Cemtrex to Host Fourth Quarter and Full Fiscal Year 2023 Financial Results Conference Call on Thursday, December 21, 2023

Cemtrex Subsidiary, Vicon Industries, Launches Anavio, A New Cloud Based, Security Software-as-a-Service Platform For Safer, Smarter Schools

Cemtrex Receives $1.0 Million Contract from Pennsylvania Borough Stewartstown

Cemtrex Receives to Present at LD Micro Main Event XVI Conference on October 3, 2023

Cemtrex Receives $1.5 Million Upgrade Order for Vicon Valerus System from Correctional Facility in Maryland

Cemtrex Announces Share Repurchase Program for Series 1 Preferred

Cemtrex Reports Third Quarter 2023 Financial Results

Cemtrex to Host Third Quarter 2023 Financial Results Conference Call on August 10, 2023

Cemtrex Closes Acquisition of Heisey Mechanical Ltd. to Expand AIS Industrial Segment

Statement of Changes in Beneficial Ownership (4)

Statement of Changes in Beneficial Ownership (4)

Cemtrex to Acquire Mechanical Contracting and Steel Fabrication Company to Expand AIS Industrial Segment

Current Report Filing (8-k)

Cemtrex to Present at LD Micro Invitational XIII Conference on June 6, 2023

CETX Discussion

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

Cemtrex Inc (CETX) News

Cemtrex Inc (CETX)

Real-time discussions and trading ideas: Trade with confidence with our powerful platform.

CETX News

Vicon Boosts its Unified VMS Platform by Integrating with Omnilert's AI Visual Gun Detection System

Cemtrex to Host Fourth Quarter and Full Fiscal Year 2023 Financial Results Conference Call on Thursday, December 21, 2023

Cemtrex Subsidiary, Vicon Industries, Launches Anavio, A New Cloud Based, Security Software-as-a-Service Platform For Safer, Smarter Schools

Cemtrex Receives $1.0 Million Contract from Pennsylvania Borough Stewartstown

Cemtrex Receives to Present at LD Micro Main Event XVI Conference on October 3, 2023

Cemtrex Receives $1.5 Million Upgrade Order for Vicon Valerus System from Correctional Facility in Maryland

Cemtrex Announces Share Repurchase Program for Series 1 Preferred

Cemtrex Reports Third Quarter 2023 Financial Results

Cemtrex to Host Third Quarter 2023 Financial Results Conference Call on August 10, 2023

Cemtrex Closes Acquisition of Heisey Mechanical Ltd. to Expand AIS Industrial Segment

Statement of Changes in Beneficial Ownership (4)

Statement of Changes in Beneficial Ownership (4)

Cemtrex to Acquire Mechanical Contracting and Steel Fabrication Company to Expand AIS Industrial Segment

Current Report Filing (8-k)

Cemtrex to Present at LD Micro Invitational XIII Conference on June 6, 2023

CETX Discussion

Your Recent History

Company

Business

Popular

Get The App