Cemtrex Reports Financial Results for the 2017 Fiscal Third Quarter
August 14 2017 - 8:35AM
Cemtrex (Nasdaq: CETX, CETXP, CETXW), a world leading industrial
and manufacturing leader, today reported its financial results for
the three-month and nine-month periods ended June 30, 2017.
“We maintained strong topline growth in the third quarter of
fiscal 2017, with total revenue increasing 13% to $27.8 million,
while remaining profitable. Our ability to drive steady revenue
growth is evident when looking out over the past couple of years.
Our revenue has increased from $42 million to $56 million to $86
million for the nine month periods ended June 30, 2015, 2016 and
2017, respectively,” stated Saagar Govil, Chairman and CEO of
Cemtrex. “We are focused on continuing to grow our business through
the acquisition of new, high quality customers, as well as
expanding organically through our existing customers. In April
2017, we received a record number of new incoming orders for a
single month, totaling over $21 million. Included in these orders
is a $15 million, three year agreement with one of our existing
customers, which is the single largest order we have ever
received.”
“In addition, we announced the establishment of our new
subsidiary, Cemtrex Advanced Technologies along with its first
development product, an advanced ‘smart desk.’ It is an exciting
time at Cemtrex as we leverage our deep experience in electronics
development and manufacturing and focus on bringing to market
proprietary technologies that we believe are revolutionary. Our
initial products, in line with the innovative ‘smart desk’, will
embrace the concept of bringing the workspace environment up to
speed with technological advances.”
“Cemtrex is strategically positioned to continue growth
organically and through acquisitions. With $13.2 million in cash
and cash equivalents we are consistently evaluating growth
opportunities to advance our businesses. This is a pivotal time for
the company as we see a strong pipeline in new and existing
customers as well as new product development under our subsidiary.
We continue to scale the business with shareholder value as a core
focus on going,” concluded Mr. Govil.
Fiscal 2017 Third Quarter Business Highlights and
Financial Highlights
- Total Revenue for Q3 2017 increased 13% to
$27.8 million, compared to $24.7 million for Q3 2016. This increase
was primarily due to the acquisition of Periscope on May 31, 2016.
- Industrial Products & Services (IPS)
Revenue for Q3 2017 increased 8% to $13.5 million,
compared to $12.5 million for Q3 2016. The increase was primarily
due to increased shipment of goods and execution of projects.
- Electronics Manufacturing Services (EMS)
Revenue for Q3 2017 increased by 17% to $14.3 million,
compared to $12.2 million for Q3 2016. This increase was primarily
due to the acquisition of Periscope, an electronics manufacturing
solutions business.
- Gross Margin for Q3 2017 was 36%, compared to
33% for Q3 2016.
- Operating Margin for Q3 2017 decreased to 5.1%
compared to 6.9% for Q3 2016. This is attributable to an increase
in operating expenses of 31% to $8.5 million, compared to $6.5
million for Q3 2016, which includes an increase of sales, marketing
and professional service costs for the 2017 period.
- Net Income for Q3 2017 was $1.2 million or
$0.11 per share, compared to $1.4 million, or $0.16 per share for
Q3 2016. This decrease was due to increase sales and marketing
expenses in the third quarter, and loss on disposal of assets.
Nine Month 2017 Financial Highlights
- Total Revenue for the nine months ended June
30, 2017 increased 54% to $87.7 million, compared to $56.9 million
for the same period in 2017. This increase was primarily due to the
acquisitions of Advanced Industrial Services (AIS) and Periscope.
- IPS Revenue for the nine months ended June 30,
2017 increased 27% to $42.0 million, compared to $33.2 million for
the same period in 2016. The increase was primarily due to
increased shipment of goods and execution of projects.
- EMS Revenue for the nine months ended June 30,
2017 increased 93% to $45.7 million, compared to $23.7 for the same
period in 2016. The primary reason for increased sales was due to
the acquisition of Periscope.
- Gross Margin for the nine months ended June
30, 2017 was 33%, compared to 31% for the same period in
2016.
- Operating Margin for the nine months ended
June 30, 2017 decreased to 4.3% from 5.4% in the same period of
2016. This increase was primarily due to an increase of sales,
marketing and professional service costs for the 2017 period.
Operating expenses increased 68% to $24.8 million, compared to
$14.8 million for the same period in 2016 due to the increase from
the acquisitions of AIS and Periscope.
- Net Income for the nine months ended June 30,
2017 increased 2% to $3.0 million, or $0.26 per share, compared to
$2.9 million, or $0.36 per share for the same period in 2016. This
increase was primarily due to the acquisitions of AIS and
Periscope.
Balance Sheet as of June 30, 2017:
- Cash and Cash equivalents were $13.2 million or $1.28 per
share.
- Book value was $3.49 per share.
Conference Call and Webcast Information
Cemtrex will host a conference call with the investment
community on Thursday, August 14th at 11:00 a.m. Eastern Time
featuring remarks by Saagar Govil, Chairman and CEO of Cemtrex. The
dial-in numbers for the conference call are 877-524-8416
(Toll-Free) or 412-902-1028 (Toll). Please call at least five
minutes before the scheduled start time.
For interested individuals unable to join the conference call, a
replay of the call will be available through August 28, 2017, at
877-660-6853 (Toll-Free) or 201-612-7415 (Toll). Participants must
use the following code to access the replay of the call:
13667842.
Cemtrex will also offer a live and archived webcast of the
conference call, accessible from the “Investor Relations” section
of the Company’s website at
http://www.cemtrex.com/investor-relations/. The online
archive of the webcast will be available for 30 days following the
call.
About Cemtrex
Cemtrex Inc. (CETX) is a global, diversified industrial and
manufacturing company that provides a wide array of solutions to
meet today’s technology challenges and is rapidly growing through
acquisitions. Cemtrex provides: manufacturing services of advanced
custom engineered electronics, industrial contracting services,
monitoring instruments for industrial processes and environmental
compliance, and equipment for controlling particulates, hazardous
pollutants and greenhouse gases used in carbon trading
globally. @Cemtrex
Safe Harbor
Statement
This press release contains forward-looking statements. Actual
results could differ materially from those projected in the
forward-looking statements as a result of a number of risks and
uncertainties. Statements made herein are as of the date of this
press release and should not be relied upon as of any subsequent
date. This release may contain non-GAAP financial information and
are not calculated or presented in accordance with US GAAP. The
Company believes that the presentation of non-GAAP financial
measures provides useful information to management and investors
regarding underlying trends in its consolidated financial condition
and results of operations. The Company’s management regularly uses
these supplemental non-GAAP financial measures internally to
understand, manage and evaluate the Company’s business and to make
operating decisions.
|
|
For
the three months ended |
|
|
For
the nine months ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Products
& Services Revenue |
|
$ |
13,467,483 |
|
|
$ |
12,468,737 |
|
|
$ |
42,024,611 |
|
|
$ |
33,206,953 |
|
Electronics
Manufacturing Services Revenue |
|
|
14,339,173 |
|
|
|
12,246,116 |
|
|
|
45,684,285 |
|
|
|
23,730,693 |
|
Total revenues |
|
|
27,806,656 |
|
|
|
24,714,853 |
|
|
|
87,708,896 |
|
|
|
56,937,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales,
Industrial Products & Services |
|
|
9,437,556 |
|
|
|
8,935,388 |
|
|
|
30,327,245 |
|
|
|
24,298,643 |
|
Cost of Sales,
Electronics Manufacturing Services |
|
|
8,437,194 |
|
|
|
7,620,796 |
|
|
|
28,393,397 |
|
|
|
14,774,708 |
|
Total cost of
revenues |
|
|
17,874,750 |
|
|
|
16,556,184 |
|
|
|
58,720,642 |
|
|
|
39,073,351 |
|
Gross profit |
|
|
9,931,906 |
|
|
|
8,158,669 |
|
|
|
28,988,254 |
|
|
|
17,864,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
|
8,526,625 |
|
|
|
6,461,447 |
|
|
|
24,833,985 |
|
|
|
14,805,001 |
|
Total operating
expenses |
|
|
8,526,625 |
|
|
|
6,461,447 |
|
|
|
24,833,985 |
|
|
|
14,805,001 |
|
Operating income |
|
|
1,405,281 |
|
|
|
1,697,222 |
|
|
|
4,154,269 |
|
|
|
3,059,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(expense) |
|
|
154,579 |
|
|
|
94,781 |
|
|
|
(81,969 |
) |
|
|
559,287 |
|
Interest Expense |
|
|
(204,992 |
) |
|
|
(237,665 |
) |
|
|
(948,360 |
) |
|
|
(597,826 |
) |
Total other income
(expense) |
|
|
(50,413 |
) |
|
|
(142,884 |
) |
|
|
(1,030,329 |
) |
|
|
(38,539 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before
income taxes |
|
|
1,354,868 |
|
|
|
1,554,338 |
|
|
|
3,123,940 |
|
|
|
3,020,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
172,286 |
|
|
|
123,298 |
|
|
|
122,197 |
|
|
|
67,424 |
|
Net income |
|
|
1,182,582 |
|
|
|
1,431,040 |
|
|
|
3,001,743 |
|
|
|
2,953,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred dividends
paid |
|
|
- |
|
|
|
- |
|
|
|
332,938 |
|
|
|
- |
|
Net income available to
common shareholders |
|
|
1,182,582 |
|
|
|
1,431,040 |
|
|
|
2,668,805 |
|
|
|
2,953,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income/(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain/(loss) |
|
|
891,215 |
|
|
|
38,392 |
|
|
|
573,389 |
|
|
|
(375,709 |
) |
Comprehensive income
available to common shareholders |
|
$ |
2,073,797 |
|
|
$ |
1,469,432 |
|
|
$ |
3,242,194 |
|
|
$ |
2,577,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common
Share-Basic |
|
$ |
0.12 |
|
|
$ |
0.16 |
|
|
$ |
0.27 |
|
|
$ |
0.36 |
|
Income Per Common
Share-Diluted |
|
$ |
0.11 |
|
|
$ |
0.16 |
|
|
$ |
0.26 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number
of Common Shares-Basic |
|
|
10,033,060 |
|
|
|
8,804,446 |
|
|
|
9,932,894 |
|
|
|
8,116,266 |
|
Weighted Average Number
of Common Shares-Diluted |
|
|
10,300,022 |
|
|
|
8,872,966 |
|
|
|
10,214,020 |
|
|
|
8,184,552 |
|
|
|
June 30, 2017 |
|
|
September 30, 2016 |
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and
equivalents |
|
$ |
13,241,368 |
|
|
$ |
6,045,521 |
|
Restricted Cash |
|
|
811,569 |
|
|
|
698,459 |
|
Accounts receivable,
net |
|
|
14,576,581 |
|
|
|
13,568,727 |
|
Inventory, net |
|
|
16,565,678 |
|
|
|
14,071,627 |
|
Prepaid expenses and
other current assets |
|
|
2,102,444 |
|
|
|
2,475,404 |
|
Deferred tax asset |
|
|
67,000 |
|
|
|
67,000 |
|
Total current
assets |
|
|
47,364,640 |
|
|
|
36,926,738 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
16,860,577 |
|
|
|
17,647,888 |
|
Goodwill |
|
|
918,819 |
|
|
|
918,819 |
|
Other assets |
|
|
85,203 |
|
|
|
540,064 |
|
Total
Assets |
|
$ |
65,229,239 |
|
|
$ |
56,033,509 |
|
|
|
|
|
|
|
|
|
|
Liabilities
& Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
8,026,375 |
|
|
$ |
7,733,459 |
|
Credit card
payable |
|
|
218,204 |
|
|
|
294,169 |
|
Sales tax payable |
|
|
247,531 |
|
|
|
263,107 |
|
Revolving line of
credit |
|
|
2,823,047 |
|
|
|
3,454,913 |
|
Accrued expenses |
|
|
3,010,121 |
|
|
|
5,174,529 |
|
Deferred revenue |
|
|
564,901 |
|
|
|
1,387,139 |
|
Accrued income
taxes |
|
|
1,139,220 |
|
|
|
1,042,589 |
|
Convertible notes
payable |
|
|
520,000 |
|
|
|
3,748,000 |
|
Current portion of
long-term liabilities |
|
|
2,015,434 |
|
|
|
2,056,887 |
|
Total current
liabilities |
|
|
18,564,833 |
|
|
|
25,154,792 |
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities |
|
|
|
|
|
|
|
|
Loans payable to
bank |
|
|
5,486,709 |
|
|
|
6,402,228 |
|
Notes payable |
|
|
397,468 |
|
|
|
1,222,158 |
|
Mortgage payable |
|
|
3,785,016 |
|
|
|
3,869,066 |
|
Notes payable to
related party |
|
|
- |
|
|
|
3,599,307 |
|
Total long-term
liabilities |
|
|
9,669,193 |
|
|
|
15,092,759 |
|
Deferred tax
liabilities |
|
|
94,000 |
|
|
|
94,000 |
|
Total liabilities |
|
|
28,328,026 |
|
|
|
40,341,551 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
Preferred stock ,
$0.001 par value, 10,000,000 shares authorized, Series A, 1,000,000
shares authorized, issued and outstanding at June 30, 2017 and
September 30, 2017 |
|
|
1,000 |
|
|
|
1,000 |
|
Series 1, 3,000,000
shares authorized, 1,736,858 and no shares issued and outstanding
as of June 30, 2017 and September 30, 2016, respectively |
|
|
1,736 |
|
|
|
- |
|
Common stock, $0.001
par value, 20,000,000 shares authorized, 10,207,739 shares issued
and outstanding at June 30, 2017 and 9,460,283 shares issued and
outstanding at September 30, 2016 |
|
|
10,207 |
|
|
|
9,460 |
|
Additional paid-in
capital |
|
|
23,350,562 |
|
|
|
5,230,745 |
|
Retained earnings |
|
|
13,938,466 |
|
|
|
11,424,900 |
|
Accumulated other
comprehensive loss |
|
|
(400,758 |
) |
|
|
(974,147 |
) |
Total shareholders’
equity |
|
|
36,901,213 |
|
|
|
15,691,958 |
|
Total
liabilities and shareholders’ equity |
|
$ |
65,229,239 |
|
|
$ |
56,033,509 |
|
Investor Relations
Cemtrex, Inc.
Phone: 631-756-9116
investors@cemtrex.com
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