Q3 2024 Cemtrex Inc Earnings Call
Greetings, and welcome to the Cemtrex 3rd Quarter 2024 Financial Results Conference Call.
Operator: and the broader 2024 Financial Results Conference call. At this time, all participants are in listen mode only.
Speaker Change: At this time, all participants are in listen mode only. A question and session will follow the formal presentation.
Operator: A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. Such forward-looking statements represent a current judgment on what the future holds. Since they are subject to risks and uncertainties that could cause actual results to differ materially, you are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation.
Speaker Change: As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements are being recorded.
Speaker Change: made on the call, and webcasts may include predictions, estimates, or other information that might be considered forward-looking.
Speaker Change: While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements.
Speaker Change: which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to this forward-looking statement in light of new information or future events.
Operator: Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Forms 10-K and 10-Q4 for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors.
Speaker Change: Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent form, 10-K and 10-Q-4.
Speaker Change: for a more complete discussion of
Speaker Change: particularly under the heading
Speaker Change: A press release detailing these results was issued this afternoon and is available in the Investor Relations section of our company's website, Cemtrex.com.
Operator: A press release detailing these results was issued this afternoon and is available in the Investor Relations section of our company's website, Cemtrex.com. Your hosts today, Saagar Govil, Chief Executive Officer, and Paul Wyckoff, Chief Financial Officer, will present an audited results of operations for the fiscal third quarter ended June 30, 2024. At this time, I will turn the call over to Cemtrex Chief Executive Officer, Saagar Govil. Thank you, Operator. Good afternoon, everyone.
Saagar Govil: Your hosts today, Saagar Govil, Chief Executive Officer and Paul Wyckoff, Chief Financial Officer, will present unaudited results of operations
Saagar Govil: for the fiscal third quarter ended June 30, 2024. At this time, I will turn the call over to Cemtrex Chief Executive Officer, Saagar Govil.
Saagar Govil: I'm pleased to welcome you to today's third quarter 2024 financial results conference call. We continue to see momentum in our segments during the third quarter, sustaining revenue year-over-year at $14.7 million. Significant demand for AIS products and services drove a 49% increase in revenue to $8.5 million, which was offset by decreases in Vitacon revenue, primarily due to the delay of multiple projects. Operating loss for the third quarter was $3.2 million compared to operating income of $0.1 million a year ago, mainly due to decreased gross profit in our security segment and increased G&A expenses.
Saagar Govil: [inaudible]
Saagar Govil: Thank you, Operator. Good afternoon, everyone. I'm pleased to welcome you to today's third quarter 2024 Financial Results Conference call.
Speaker Change: We continue to see momentum in our segments during the third quarter, sustaining revenue year over year at $14.7 million. Significant demand for AIS products and services drove a 49% increase in revenue to $8.5 million, which was offset by decreases in BICON revenue, primarily due to the delay of multiple projects.
Speaker Change: Operating loss for the third quarter was $3.2 million compared to operating income of $0.1 million a year ago, mainly due to decreased gross profit in our security segment and increased G&A expenses.
Saagar Govil: The operating loss for the nine-month period was approximately $5 million, compared to $1.5 million a year ago, despite the higher... However, these results include approximately $2 million in one-time expenses related to employee-related one-time charges, legal expenses, and some bad debt write-off.
Speaker Change: The operating loss for the nine-month period was approximately $5 million compared to $1.5 million a year ago despite the higher sales.
Speaker Change: However, these results include approximately $2 million in one-time expenses related to employee-related one-time charges, legal expenses, and some bad debt write-offs.
Saagar Govil: We remain committed to our goal of achieving a full-year operating profit and are working hard to drive revenue while maintaining tight costs. In our security segment, despite project delays, the team at Vicon continues to push the deployment of new technologies and products with investments in sales and marketing resources that we believe will drive sales over the next several quarters. We also were able to reduce our inventory by over a million dollars this fiscal year as we strive to make our operations more efficient.
Speaker Change: We remain committed to our goal of achieving a full year operating profit and are working hard to drive revenue while maintaining tight cost controls.
Speaker Change: The NRC-30 segment despite project delays, the team advice on continues to push the deployment of new technologies and products with investments and to sales and marketing resources, and we believe we'll drive sales over the next several quarters.
Speaker Change: We also were able to reduce our inventory by over a million this fiscal year as we strive to make our operations more efficient.
Saagar Govil: We expect, with the launch of the innovative new cloud security platform, Anavio, along with new technologies to be released later this year and continued improvements to our core software platform, Valeris, we are confident that in fiscal year 2025, Vicon will see strong growth in revenue. Our industrial services segment delivered another strong quarter on orders from leading companies, building a pipeline of growth that we believe will produce a record year of revenue.
Speaker Change: We expect with the launch of the innovative new cloud security platform, Anavio, along with new technologies to be released later this year, and continued improvements to our core software platform, Valerius, we are confident that in fiscal year 2025, Vicon will see strong growth in revenue.
Speaker Change: Our industrial services segment delivered another strong quarter on orders from leading companies building a pipeline of growth that we believe will produce a record year of revenue.
Saagar Govil: We continue to believe with additional orders ahead, AIS has the potential to reach more than 30% annual revenue growth in fiscal year 24, with further growth in fiscal year 25. During the quarter, we took the opportunity to improve our balance sheet with a $10 million upsize underwritten public offering, of which a portion of the proceeds were used to pay off some of our indebted debt. Looking ahead, we are now well-positioned for additional growth and to reach our goal of achieving positive operating income in the future.
Speaker Change: We continue to believe with additional orders ahead, AIS has the potential to reach more than 30% annual revenue growth in fiscal year 24, with further growth in fiscal year 25.
Speaker Change: During the quarter, we took the opportunity to improve our balance sheet with a $10 million upsize underwritten public offering, of which a portion of the proceeds were used to pay off some of our indebtedness. Looking ahead, we are now well positioned for additional growth and to reach our goal of achieving positive operating income in the future.
Saagar Govil: The strengthened balance sheet also provides the ability to explore acquisition opportunities that can enhance our market reach and services, as we continue to seek long-term value for our share. I'll now turn the call over to Paul Wyckoff, CFO, to discuss the funding. Thank you, Saagar.
Speaker Change: The Strengthened Balance Sheet also provides the ability to explore acquisition opportunities that can enhance our market reach and service capability as we continue to seek long-term value for our shareholders.
Paul Wyckoff: I'll now turn the call over to Paul Wyckoff, CFO, to discuss the financials.
Paul Wyckoff: Revenue for the third quarters of 2024 and 2023 was a flat $14.7 million. However, the security segment revenues for the third quarter of 2024 decreased by 31% to $6.2 million. The security segment decrease was due to a delay in multiple projects for the segment's services, products, and services, and overall economic conditions in the industry.
Paul Wyckoff: [inaudible]
Paul Wyckoff: Thank you, Saagar.
Paul Wyckoff: Revenue for the third quarters of 2024 and 2023 was a flat $14.7 million. The security segment revenues for the third quarter of 2024 decreased by 31% to $6.2 million. The security segment decrease was due to a delay of multiple projects for the segment services, products and services, and overall economic conditions in the industry.
Paul Wyckoff: The industrial services segment revenues for the quarter increased by 49% to $8.5 million, mainly due to increased demand for the segment's services, as well as additional revenue due to the IV acquisition completed during the fourth quarter of fiscal year 2023. Gross profit for the third quarter of 2024 was $5.9 million, or 40% of revenues, as compared to gross profit of $6.5 million, or 44% of revenues, for the third quarter of 2023.
Paul Wyckoff: The industrial services segment revenues for the quarter increased by 49% to $8.5 million, mainly due to the increased demand for the segment services, as well as additional revenue due to the IV acquisition completed during the fourth quarter of fiscal year 2023.
Paul Wyckoff: Gross profit for the third quarter of 2024 was $5.9 million, or 40% of revenues, as compared to gross profit of $6.5 million, or 44% of revenues, for the third quarter of 2023.
Paul Wyckoff: Total operating expenses for the three months ending June 30, 2024, were $9.1 million compared to $6.4 million in the prior year's quarter. The operating loss for the third quarter of 2024 was $3.2 million as compared to operating income of $0.1 million for the third quarter of 2023. The operating loss is primarily due to a decrease in gross profit in our security segment and an overall increase in G&A expenses.
Paul Wyckoff: Total operating expenses for the three months into June 30, 2024 were $9.1 million compared to $6.4 million in the prior year's quarter.
Paul Wyckoff: Operating loss for the third quarter of 2024 was $3.2 million as compared to operating income of $0.1 million for the third quarter of 2023.
Paul Wyckoff: The operating losses primarily due to the degrees and gross property in our security segment and overall increase in DNA expenses.
Paul Wyckoff: The net loss for the third quarter of 2024 was $9.1 million as compared to a net loss of $1.2 million in the third quarter of 2023. Cash and cash equivalents and restricted cash totaled $7.6 million on June 30, 2024, as compared to $6.3 million on September 30, 2023. Inventories decreased to $7.5 million on June 30, 2024 from $8.7 million on September 30, 2023.
Paul Wyckoff: Net loss for the third quarter of 2024 was $9.1 million as compared to a net loss of $1.2 million in the third quarter of 2023.
Paul Wyckoff: Cash and Cash Equivalents and Restricted Cash fell $7.6 million on June 30, 2024 as compared to $6.3 million on September 30, 2023.
Paul Wyckoff: Inventories decreased to $7.5 million on June 30, 2024 from $8.7 million on September 30, 2023.
Saagar Govil: I will now turn the call back to Saagar for a review of our 2024 Outlook. Thank you, Paul. In summary, with a fortified balance sheet from the $10 million upsize offering we closed, we're making steady progress toward achieving a goal of achieving positive operating income in the future. On the acquisition front, we are consistently evaluating potential value at acquisition opportunities that can further accelerate our growth.
Paul Wyckoff: I will now turn the call back to Saagar for a review of our 2024 Outlook.
Saagar Govil: Thank you Paul.
Saagar Govil: In summary, with a fortified balance sheet from the $10 million upsize offering we closed, we're making steady progress toward a goal of achieving positive operating income in the future.
Speaker Change: On the acquisition front, we are consistently evaluating potential value-add acquisition opportunities that can further accelerate our growth.
Saagar Govil: As we execute on our strategic initiatives while prudently managing our balance sheet, we are well positioned for long-term growth. We look forward to providing additional updates in the months to come as we work to build long-term value for our show. I thank you all for attending, and now I would like to answer your questions. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number 1 on your touchtone phone, and you will hear a prompt that your hand has been raised.
Speaker Change: As we execute on our strategic initiatives, while prudently managing our balance sheet, we are well positioned for long-term growth, we look forward to providing additional updates in the months to come as we work to build long-term value for our shoulders. I thank you all for attending and now would like to answer your questions, operator.
Speaker Change: Thank you.
Saagar Govil: Should you wish to decline the polling process, please press the star followed by the number 2. If you use a speakerphone, please lift the handset before pressing any key. One moment please, I'll ask your first question. We have one who raised his hand, which is Richard Arnold. However, I think the line, Or... He declined from the polling process; as of right now, there are no analysts or participants raising hands for any questions.
Speaker Change: Ladies and gentlemen, we will now begin
Speaker Change: Should you have a question?
Speaker Change: Please press star, followed by the number one on your touchstone phones.
Speaker Change: and you will hear a prompt that your hand has been raised.
Speaker Change: Should you wish to decline from the polling process, please press the star followed by the number 2. If you use a speakerphone, please lift the handset before pressing any keys. One moment, please. I'll for your first question.
Speaker Change: [inaudible]
Speaker Change: Govil Wyckoff, Saagar Govil Wyckoff, Saagar Govil Wyckoff, Saagar Govil Wyckoff,
Richard Arnold: We have one who race hands, which is Richard Arnold, however I think the line.
Richard Arnold: War
Speaker Change: He declined that from the polling process, as of right now, there is no.
Speaker Change: Analysts or participants is raising hand for any questions.
Speaker Change: Paul Wyckoff, Saagar, Cemtrex
Speaker Change: [inaudible]
Speaker Change: Thank you very much, Paul Wyckoff, Saagar Govil, Cemtrex
Paul Wyckoff: In the end, Paul Wyckoff, Saagar Govil, Saagar Govil, Saagar Govil, Saagar
Operator: As a reminder, if you wish to ask a question, please press star 1. Larano, any further questions at this time. I would now like to turn the call back over to Mr. Saagar Govil for his closing remarks. Thank you, Operator. I'd like to thank each of you for joining our earnings call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any questions, please feel free to reach out to our IR firm, MZ Group. We'd be more than happy.
Speaker Change: As a reminder, if you wish to ask a question, please press star 1.
Speaker Change: Govil Wyckoff, Saagar Govil Wyckoff, Saagar Govil,
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Operator: Thanks, everyone. Bye-bye. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change: There are no further questions at this time. I would now like to turn the call back over to Mr. Saagar Govil for his closing remarks.
Saagar Govil: Thank you, Operator. I'd like to thank each of you for joining our earnings call today and look forward to continuing to update you on our ongoing progress in growth. If we were unable to answer any questions, please feel to reach out to our IR firm and the group could be more than happy to assist. Thanks everyone.
Speaker Change: Ladies and gentlemen, this concludes the day's conference call. Thank you for your participation. You may now disconnect.
Operator: As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and the webcast may include predictions. Estimates are other information that might be considered forward-looking. While this forward-looking statement is being recorded, I would like to remind everyone that statements made on the call and webcast may include predictions. Estimates are other information that might be considered forward-looking. They are present or current judgement on what the future holds.
Operator: They are subject to risks and uncertainties that could cause actual results to defer materially. You are cautioned not to place undue reliance on these forward-looking statements. Which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to this forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions.
Operator: You should also review our most recent form, 10K and 10Q4 for a more complete discussion of these factors and other risks, particularly under the heading risk factors.
Saagar Govil: As this time, I will turn the call over to semtrex chief executive officer, Sagar Gaville.
Saagar Govil: Thank you, operator.
Saagar Govil: Good afternoon, everyone. I'm pleased to welcome you to today's third quarter, 2024 Financial Results Conference call. We continue to see momentum in our segments during the third quarter, sustaining revenue year over year at 14.7 million. Significant demand for AIS products and services drove a 49% increase in revenue to 8.5 million, which was offset by decreases in buy-con revenue, primarily due to the delay of multiple projects. Operating loss for the third quarter was 3.2 million compared to operating income of 0.1 million a year ago, mainly due to decreased gross profit in our security segment and increased DNA expenses. The operating loss for the nine month period was approximately 5 million compared to 1.5 million a year ago, despite the higher sales.
Saagar Govil: However, these results include approximately 2 million and one time expenses related to employee related one time charges, legal expenses, and some bad debt right off. We remain committed to our goal of achieving a full year operating profit and our working hard to drive revenue well maintaining tight cost controls. In our security segment, despite project delays, the team at buy-con continues to push the deployment of new technologies and products with investments in the sales and marketing resources that we believe will drive sales over the next several quarters.
Saagar Govil: We also were able to reduce our inventory by over a million this fiscal year as we strive to make our operations more efficient. We expect with the launch of an innovative new cloud security platform, Anavio, along with new technologies to be released later this year and continuing improvements to our core software platform, Valerius. We are confident that in fiscal year 2025, Vicon will see strong growth in revenue. Our industrial services segment delivered another strong quarter on orders from leading companies building a pipeline of growth that we believe will produce a record-year revenue.
Saagar Govil: We continue to believe with additional orders ahead, AIS has the potential to reach more than 30% annual revenue growth in fiscal year 24, with further growth in fiscal year 25. During the quarter, we took the opportunity to improve our balance sheet with a 10 million upside underwritten public offering, which a portion of the proceeds were used to pay off some of our indebtedness. Looking ahead, we are now well positioned for additional growth and to reach our goal of achieving positive operating income in the future. The strengthen balance sheet also provides the ability to explore acquisition opportunities that can enhance our market reach and service capability, as we continue to seek long-term value for our shareholders.
Paul Wyckoff: I will now turn the call over to Paul Weikoff, CFO, to discuss the financial.
Paul Wyckoff: Thank you, Saugher. Revenue for the third quarter of 2024 and 2023 was a flat 14.7 million. The security segment revenues for the third quarter of 2024 decreased by 31% to 6.2 million.
Paul Wyckoff: The security segment decrease was due to a delay of multiple projects for the segment services, products and services, and overall economic conditions in the industry. The industrial services segment revenues for the quarter increased by 49% to 8.5 million. Mainly due to the increase demand for the segment services, as well as additional revenue due to the IPA acquisition, completed during the fourth quarter of fiscal year 2023. Gross profit for the third quarter of 2024 was 5.9 million or 40% of revenues as compared to the gross profit of 6.5 million or 44% of revenues for the third quarter of 2023. Total operating expenses for the three months and the June 30 of 2024 were 9.1 million compared to 6.4 million in the prior year's quarter.
Paul Wyckoff: Operating loss for the third quarter of 2024 was 3.2 million as compared to operating the income of 0.1 million for the third quarter of 2023. The operating loss was primarily due to the decrease in gross profit in our security segment and overall increase in GNA expenses.
Paul Wyckoff: Net loss for the third quarter of 2024 was 9.1 million as compared to a net loss of 1.2 million in the third quarter of 2023. Cash and cash equivalents and restricted cash sold 7.6 million at June 30, 2024 as compared to 6.3 million at September 30, 2023.
Paul Wyckoff: Inventories decreased to 7.5 million at June 30, 2024 from 8.7 million at September 30, 2023.
Saagar Govil: I will now turn the call back to Saagar for a review of our 2024 Outlook. Thank you, Paul. In summary, with a fortified balance sheet from the $10 million of size offering we close, we are making steady progress toward a goal of achieving positive operating income in the future. On the acquisition front, we are consistently evaluating potential value at acquisition opportunities that can further accelerate our growth. As we execute on our strategic initiatives while prudently managing our balance sheet, we are well positioned for long-term growth. We look forward to providing additional updates in the month to come as we work to build long-term value for our shareholders.
Saagar Govil: I thank you all for attending and now would like to answer your questions.
Operator: Operator. Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch-tone phone, and you will hear a prompt that your hand has been erased. Should you wish to decline from the polling process, please press the star followed by the number two. If you use the speaker phone, please lift the hand set before pressing any keys.
Operator: One moment please, I'll for your first question. We have one to erase hands, which is Richard R. Rinal. However, I think the line or he declined from the polling process. As of right now, there is no analysts or participants is racing hand for any questions. As a reminder, if you wish to ask a question, please press star one.
Operator: There are no further questions at this time.
Saagar Govil: I would now like to turn the call back over Thank you, operator. I'd like to thank each of you for joining our earnings call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any questions, please feel to reach out to our IR firm Envy Group who would be more than happy to do so.
Operator: Thanks, everyone. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Thank you very much.