Cemtrex Reports Second Quarter 2022 Financial Results
May 17 2022 - 8:45AM
- Cemtrex Inc. (NASDAQ: CETX, CETXP), a technology company
driving innovation in Internet of Things (IoT), security, machine
vision & artificial intelligence, and augmented & virtual
reality, has reported its financial and operational results for the
second quarter ended March 31, 2022.
Key Second
Quarter 2022
and Subsequent Highlights
-
Revenue increased 37% to $12.7 million compared to $9.3 million in
Q2’21.
-
Announced a strategic shift towards prioritizing its core
businesses, in particular Vicon Industries, its security technology
brand to maximize shareholder value, drive long term growth, and
profitability. In conjunction with the strategy shift to bolster
its Advanced Technologies segment, Cemtrex is exploring the
divestiture of one or more business units to support its
refocus.
-
Received a $1.2 million order through its Advanced Technology
Segment from a large correctional facility, and current customer,
in Oregon to upgrade its security technology system with new
hardware and software.
-
Second investment of $0.5 million into Masterpiece Studio (formerly
MasterPieceVR), a developer of a professional desktop and VR
application suite that offers 3D content creation tools, primarily
for virtual reality and the Metaverse.
-
onXRP.com, a leading technology and content platform which provides
user-driven innovation to the XRP Ledger (XRPL), and CXR, a
subsidiary of Cemtrex, partnered to create a set of modular
extensions that will help further develop the onXRP ecosystem.
-
Regained compliance with Nasdaq Audit Committee composition
requirements.
-
Showcased Vicon’s end-to-end technology solutions at ISC West
Conference.
Management Commentary
Cemtrex Chairman and CEO, Saagar Govil,
commented on the results: “During the second quarter we continued
to see significant revenue improvement in our Advanced Technologies
and Industrial Services segments from the improved economic
climate. This momentum, combined with a thorough review of our
business units, created the opportunity for us to commence a
strategic shift toward refocusing efforts on our core businesses
going forward. In particular, we believe Vicon Industries has
enormous untapped potential with escalating demand as end-users
seek a reliable source of video surveillance and access control
technologies fit for today’s highly dynamic environment. During the
quarter, Vicon received an upgrade order for $1.2 million from a
from a large correctional facility, and current customer, in Oregon
that further validated its technology. We expect Vicon to move
towards $5-10 million of recurring revenue in the next three to
five years as the industry shifts to SaaS solutions leveraging AI
and cloud technology solutions.
“In conjunction with this new focus, we continue
to evaluate a range of operational and financial alternatives
including the sale of one or more of the company’s business units.
We are also taking steps to address rising costs by increasing
prices and reducing overhead where possible. We believe these steps
will improve gross margins back to higher levels with the goal to
return to positive EBITDA for FY 2023. We believe this approach is
the best path to unlocking significant shareholder value in moving
forward and will allow us to prioritize our security business and
our Industrial Services segment that continues to be a strong
source of cash flow with high repeat business and a well-known
reputation.
“Along with improving year over year revenues,
the second quarter of 2022 was highlighted by the development of
key partnerships with technology companies in blockchain and VR.
Looking ahead, we remain focused on our top line growth with
investments in our sales and marketing program, ongoing research
and development, and advancing our technology partnerships. Vicon
will be launching a proprietary AI based analytics solution later
this year as well as major improvements to its core software
platform Valerus, which will further drive growth. We believe our
new focus will further position us for long-term growth and remain
optimistic that our revenue will continue to improve,” concluded
Govil.
Second Quarter
2022 Financial
Results
Revenue for the three months ended March 31,
2022, and 2021 was $12.7 million and $9.3 million, respectively, an
increase of 37%. Revenue for the six months ended March 31, 2022,
and 2021 was $23.4 million and $18.1, respectively, an increase of
29%. This increase is mainly due to an improvement in economic
conditions from the impact of the COVID-19 crisis during the same
period last year. The Advanced Technologies segment revenues for
the three months ended March 31, 2022, increased by 41% to $7.7
million, and the Industrial Services segment revenues for quarter
increased by 33%, to $5.0 million.
Gross Profit for the second quarter of 2022 was
$4.1 million, or 32% of revenues as compared to gross profit of
$3.9 million, or 42% of revenues for the year ago period. Gross
profit decreased primarily due to increased freight charges and
supply chain shortages.
Total operating expenses for three months ended
March 31, 2022, were $7.9 million, compared to $5.9 million in the
prior year’s quarter.
Operating activities for continuing operations
used $7.2 million for the six months ended March 31, 2022 compared
to using $2.9 million of cash for the six months ended March 31,
2021.
Net loss for the quarter ended March 31, 2022
was $4.7 million, as compared to a net income of $2.4 million in
2021. Net loss increased in the first quarter as compared to the
same period last year primarily due to costs of revenues and
operating expenses.
Cash and cash equivalents totaled $9.0 million
at March 31, 2022, as compared to $15.4 million at September 30,
2021.
About
Cemtrex
Cemtrex, Inc. (CETX) is a leading multi-industry
technology company that is driving innovation in markets such as
Internet of Things (IoT), Augmented and Virtual Reality (AR &
VR), and Artificial Intelligence and Computer Vision (AI & CV)
in a wide range of sectors, including consumer products, industrial
manufacturing, digital applications, and intelligent security &
surveillance systems. 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
an offering, gross proceeds from an 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.
Investor Relations
Chris Tyson
Executive Vice President – MZ North America
Direct: 949-491-8235
CETX@mzgroup.us
www.mzgroup.us
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