Cemtrex Reports Second Quarter 2024 Financial Results
Cemtrex (NASDAQ: CETX, CETXP) reported its Q2 2024 financial results, noting a 7% YoY revenue increase to $17.2 million.
The Security segment's revenue fell 18% to $8.1 million due to project delays, while the Industrial Services segment's revenue surged 47% to $9.1 million, driven by increased demand and contributions from Heisey Mechanical acquisition.
Despite the higher sales, the company saw a $1.0 million operating loss versus a $0.4 million operating income in Q2 2023, attributed to reduced gross profit in the Security segment and higher payroll expenses.
Net loss for the quarter was $1.6 million, compared to a $0.5 million loss in Q2 2023.
The company completed a $10 million public offering to boost operations and partially repay debt, with cash reserves at $4.1 million as of March 31, 2024.
- Revenue increased 7% YoY to $17.2 million.
- Industrial Services segment revenue rose 47% to $9.1 million.
- Completed a $10 million upsized public offering for operations and debt repayment.
- Cash reserves of $4.1 million as of March 31, 2024.
- Reduced inventory by over $1 million.
- New technology deployments in the Security segment, including the Anavio cloud platform.
- AIS secured significant new orders, including a $1.6 million project.
- Security segment revenue decreased 18% to $8.1 million due to project delays.
- Operating loss of $1.0 million, compared to $0.4 million operating income in Q2 2023.
- Net loss increased to $1.6 million from $0.5 million in Q2 2023.
- Gross profit decreased to $6.9 million (40% of revenues) from $7.3 million (46% of revenues) in Q2 2023.
- Increase in total operating expenses to $8.0 million from $7.0 million in Q2 2023.
- Cash reserves decreased to $4.1 million from $6.3 million as of September 30, 2023.
Insights
The recent financial results for Cemtrex Inc. show a mixed bag of outcomes, notable both for their growth and challenges. The company reported a 7% increase in revenue to
The performance of Cemtrex's market segments provides a deeper insight into its operational dynamics. The Security segment faced an 18% drop in revenue, attributed to project delays. However, this decline is partially offset by a 2% year-over-year increase for the half-year period, signaling potential future recoveries once delayed projects are resumed. On the other hand, the Industrial Services segment posted substantial growth with a 47% increase in Q2’24 revenues, driven by high demand and the recent acquisition. This aligns with broader industry trends where industrial services are seeing a resurgence post-pandemic. Investors should keep an eye on the progress of delayed security projects and further industrial demand to gauge future performance.
The mention of Cemtrex's new security platform, Anavio, indicates ongoing innovation in their product offerings. Anavio’s integrated control features, including face authentication and forensic tracking, cater to a growing demand for comprehensive security solutions. Such advancements could help Cemtrex capitalize on the increasing emphasis on security in both corporate and public sectors. However, the practical uptake and market penetration of these technologies will be critical in determining their financial impact. Competitive positioning and customer testimonials will be essential metrics to watch.
Q2’24 Revenue Increased
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 decreased
- 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
“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
“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
“Looking ahead, strengthened by an improved balance sheet from our
Second Quarter FY 2024 Financial Results
Revenue for the three months ended March 31, 2024, and 2023 was
Gross Profit for the three months ended March 31, 2024, was
Total operating expenses for three months ended December 31, 2023, were
Operating loss for the second quarter of 2024 was
Net loss for the quarter ended March 31, 2024 was
Cash, cash equivalents and restricted cash totaled
Inventories decreased to
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 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 www.ais-york.com
For more information visit 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.
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| (Unaudited) | ||||||||
| March 31, | September 30, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 2,916,120 | $ | 5,329,910 | ||||
| Restricted cash | 1,172,416 | 1,019,652 | ||||||
| Short-term investments | 13,853 | 13,663 | ||||||
| Trade receivables, net | 11,535,880 | 9,209,695 | ||||||
| Trade receivables, net - related party | 1,479,703 | 1,143,342 | ||||||
| Inventory, net | 7,397,747 | 8,739,219 | ||||||
| Contract assets, net | 1,979,679 | 1,739,201 | ||||||
| Prepaid expenses and other current assets | 1,910,415 | 2,098,359 | ||||||
| Total current assets | 28,405,813 | 29,293,041 | ||||||
| Property and equipment, net | 8,902,051 | 9,218,701 | ||||||
| Right-of-use operating lease assets | 2,193,011 | 2,287,623 | ||||||
| Royalties receivable, net - related party | 440,049 | 674,893 | ||||||
| Note receivable, net - related party | 761,585 | 761,585 | ||||||
| Goodwill | 4,381,891 | 4,381,891 | ||||||
| Other | 2,161,862 | 1,836,009 | ||||||
| Total Assets | $ | 47,246,262 | $ | 48,453,743 | ||||
| Liabilities & Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 5,741,091 | $ | 6,196,406 | ||||
| Accounts payable - related party | 9,214 | 68,509 | ||||||
| Sales tax payable | 37,487 | 35,829 | ||||||
| Revolving line of credit | 4,019,234 | - | ||||||
| Current maturities of long-term liabilities | 914,170 | 14,507,711 | ||||||
| Operating lease liabilities - short-term | 792,141 | 741,487 | ||||||
| Deposits from customers | 207,708 | 57,434 | ||||||
| Accrued expenses | 2,676,079 | 2,784,390 | ||||||
| Contract liabilities | 1,899,409 | 980,319 | ||||||
| Deferred revenue | 1,404,608 | 1,583,406 | ||||||
| Accrued income taxes | 404,288 | 388,627 | ||||||
| Total current liabilities | 18,105,429 | 27,344,118 | ||||||
| Long-term liabilities | ||||||||
| Long-term debt | 21,553,920 | 9,929,348 | ||||||
| Long-term operating lease liabilities | 1,462,545 | 1,607,202 | ||||||
| Other long-term liabilities | 317,093 | 501,354 | ||||||
| Deferred Revenue - long-term | 654,617 | 727,928 | ||||||
| Total long-term liabilities | 23,988,175 | 12,765,832 | ||||||
| Total liabilities | 42,093,604 | 40,109,950 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock , | 2,408 | 2,293 | ||||||
| Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at March 31, 2024 and September 30, 2023 | 50 | 50 | ||||||
| Common stock, | 1,056 | 1,046 | ||||||
| Additional paid-in capital | 68,936,696 | 68,881,705 | ||||||
| Accumulated deficit | (66,806,600 | ) | (64,125,895 | ) | ||||
| Treasury stock, 136,051 shares of Series 1 Preferred Stock at March 31, 2024 and 64,100 shares of Series 1 Preferred Stock at September 30, 2023 | (217,996 | ) | (148,291 | ) | ||||
| Accumulated other comprehensive income | 2,773,784 | 3,076,706 | ||||||
| Total Cemtrex stockholders’ equity | 4,689,398 | 7,687,614 | ||||||
| Non-controlling interest | 463,260 | 656,179 | ||||||
| Total liabilities and stockholders’ equity | $ | 47,246,262 | $ | 48,453,743 | ||||
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
| For the three months ended | For the six months ended | ||||||||||||||||
| March 31, 2024 | March 31, 2023 | March 31, 2024 | March 31, 2023 | ||||||||||||||
| Revenues | $ | 17,159,595 | $ | 16,073,397 | $ | 34,037,761 | $ | 28,043,639 | |||||||||
| Cost of revenues | 10,220,179 | 8,734,916 | 20,015,946 | 15,662,543 | |||||||||||||
| Gross profit | 6,939,416 | 7,338,481 | 14,021,815 | 12,381,096 | |||||||||||||
| Operating expenses | |||||||||||||||||
| General and administrative | 7,020,157 | 5,318,267 | 13,992,123 | 10,482,605 | |||||||||||||
| Research and development | 951,400 | 1,615,341 | 1,800,205 | 3,445,054 | |||||||||||||
| Total operating expenses | 7,971,557 | 6,933,608 | 15,792,328 | 13,927,659 | |||||||||||||
| Operating (loss)/income | (1,032,141 | ) | 404,873 | (1,770,513 | ) | (1,546,563 | ) | ||||||||||
| Other (expense)/income | |||||||||||||||||
| Other income/(expense), net | 144,765 | 376,504 | 223,176 | 359,421 | |||||||||||||
| Interest expense | (592,804 | ) | (1,335,138 | ) | (1,176,487 | ) | (2,463,372 | ) | |||||||||
| Total other (expense)/income, net | (448,039 | ) | (958,634 | ) | (953,311 | ) | (2,103,951 | ) | |||||||||
| Net loss before income taxes | (1,480,180 | ) | (553,761 | ) | (2,723,824 | ) | (3,650,514 | ) | |||||||||
| Income tax expense | (100,004 | ) | - | (170,755 | ) | - | |||||||||||
| Loss from Continuing operations | (1,580,184 | ) | (553,761 | ) | (2,894,579 | ) | (3,650,514 | ) | |||||||||
| Income/(loss) from discontinued operations, net of tax | 10,463 | 14,232 | 20,955 | (3,225,389 | ) | ||||||||||||
| Net loss | (1,569,721 | ) | (539,529 | ) | (2,894,579 | ) | (6,875,903 | ) | |||||||||
| Less (loss)/income in noncontrolling interest | (96,510 | ) | 55,265 | (192,919 | ) | (3,898 | ) | ||||||||||
| Net loss attributable to Cemtrex, Inc. stockholders | $ | (1,473,211 | ) | $ | (594,794 | ) | $ | (2,680,705 | ) | $ | (6,872,005 | ) | |||||
| (Loss)/income per share - Basic & Diluted | |||||||||||||||||
| Continuing Operations | $ | (1.46 | ) | $ | (0.82 | ) | $ | (2.62 | ) | $ | (4.70 | ) | |||||
| Discontinued Operations | $ | 0.01 | $ | 0.02 | $ | 0.02 | $ | (4.09 | ) | ||||||||
| Weighted Average Number of Shares-Basic & Diluted | 1,055,636 | 815,498 | 1,051,630 | 788,265 | |||||||||||||
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the six months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | (2,873,624 | ) | $ | (6,875,903 | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities | ||||||||
| Depreciation and amortization | 673,190 | 448,388 | ||||||
| Gain on disposal of property and equipment | - | 64,908 | ||||||
| Noncash lease expense | 389,125 | 420,411 | ||||||
| Bad debt expense | 35,213 | (1,543 | ) | |||||
| Share-based compensation | 15,116 | 66,577 | ||||||
| Income tax expense | (96,750 | ) | - | |||||
| Interest expense paid in equity shares | - | 32,145 | ||||||
| Accounts payable paid in equity shares | 40,000 | 102,500 | ||||||
| Accrued interest on notes payable | 657,355 | 1,290,615 | ||||||
| Non-cash royalty income | (26,564 | ) | - | |||||
| Gain/(loss) on marketable securities | (190 | ) | 58 | |||||
| Amortization of original issue discounts on notes payable | - | 883,467 | ||||||
| Amortization of loan origination costs | 36,267 | - | ||||||
| Changes in operating assets and liabilities net of effects from acquisition of subsidiaries: | ||||||||
| Trade receivables | (2,317,074 | ) | (1,870,729 | ) | ||||
| Trade receivables - related party | (178,980 | ) | (408,464 | ) | ||||
| Inventory | 1,341,472 | (73,209 | ) | |||||
| Contract assets | (240,478 | ) | (12,597 | ) | ||||
| Prepaid expenses and other current assets | 483,043 | (141,562 | ) | |||||
| Other assets | (225,853 | ) | (185,165 | ) | ||||
| Accounts payable | (455,315 | ) | 256,584 | |||||
| Accounts payable - related party | 408 | (15,765 | ) | |||||
| Sales tax payable | 1,658 | 90,204 | ||||||
| Operating lease liabilities | (388,516 | ) | (356,176 | ) | ||||
| Deposits from customers | 150,274 | 1,618 | ||||||
| Accrued expenses | (108,311 | ) | 701,414 | |||||
| Contract liabilities | 919,090 | 554,966 | ||||||
| Deferred revenue | (252,109 | ) | (86,106 | ) | ||||
| Income taxes payable | (146,422 | ) | (37,698 | ) | ||||
| Other liabilities | (184,261 | ) | (231,998 | ) | ||||
| Net cash used by operating activities - continuing operations | (2,752,236 | ) | (5,383,060 | ) | ||||
| Net cash provided by operating activities - discontinued operations | - | 2,488,144 | ||||||
| Net cash used by operating activities | (2,752,236 | ) | (2,894,916 | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of property and equipment | (355,308 | ) | (263,732 | ) | ||||
| Proceeds from sale of property and equipment | - | 11,026 | ||||||
| Investment in MasterpieceVR | (100,000 | ) | - | |||||
| Net cash used by investing activities | (455,308 | ) | (252,706 | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds on revolving line of credit | 19,360,672 | - | ||||||
| Payments on revolving line of credit | (15,413,971 | ) | - | |||||
| Payments on debt | (2,429,743 | ) | (544,370 | ) | ||||
| Payments on Paycheck Protection Program Loans | (20,242 | ) | (10,033 | ) | ||||
| Proceeds on bank loans | 28,331 | - | ||||||
| Payments on bank loans | (204,802 | ) | (365,724 | ) | ||||
| Purchases of treasury stock | (69,705 | ) | ||||||
| Net cash provided by/(used by) financing activities | 1,250,540 | (920,127 | ) | |||||
| Effect of currency translation | (304,022 | ) | (126,593 | ) | ||||
| Net decrease in cash, cash equivalents, and restricted cash | (1,957,004 | ) | (4,067,749 | ) | ||||
| Cash, cash equivalents, and restricted cash at beginning of period | 6,349,562 | 11,473,676 | ||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 4,088,536 | $ | 7,279,334 | ||||
| Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash | ||||||||
| Cash and cash equivalents | $ | 2,916,120 | $ | 6,634,037 | ||||
| Restricted cash | 1,172,416 | 645,297 | ||||||
| Total cash, cash equivalents, and restricted cash | $ | 4,088,536 | $ | 7,279,334 | ||||
FAQ
What was Cemtrex's revenue in Q2 2024?
Did Cemtrex's Security segment revenue increase in Q2 2024?
What was the revenue growth in Cemtrex's Industrial Services segment for Q2 2024?
What was Cemtrex's net loss for Q2 2024?
What were Cemtrex's cash reserves at the end of Q2 2024?
How much did Cemtrex raise in its recent public offering?
What was Cemtrex's operating loss in Q2 2024?
What new technology did Cemtrex's Security segment launch?
