Hauppauge, NY, Feb. 14, 2025 (GLOBE NEWSWIRE) -- Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, has reported its financial and operational results for the fiscal first quarter ended December 31, 2024.
Key Highlights for First Fiscal Quarter 2025
- Revenue for Q1'25 decreased 19% to $13.7 million, compared to revenue in the prior year of $16.9 million.
- AIS revenue increased 7% to $8.3 million, capitalizing on strategic acquisitions and growing market demand.
- Vicon Innovations: Launched NEXT Modular Camera System, integrating groundbreaking AI analytics and Hailo-15 edge AI processing, poised to redefine the surveillance industry.
- Strategic Momentum: Secured a record-breaking $10.4 million order for Valerus surveillance system expansion
Management Commentary
Cemtrex Chairman and CEO, Saagar Govil, commented on the results: "The first fiscal quarter of 2025 was highlighted by sustained growth for AIS on high demand for its products and services, offset by a decrease in Vicon revenue as companies delayed orders of multiple projects due to uncertainties with the transition to a new federal administration. Operating loss for the first fiscal quarter of 2025 was $2.3 million, compared to $0.7 million a year ago, mainly due to the decrease in revenue and resulting lower gross profit. Net loss was $28.5 million compared to $1.2 million in the prior year's quarter, primarily due to recognized losses on excess fair value of warrants, a non-cash expense of $25.8 million.
"Our Security segment revenue in the first quarter decreased 41% to $5.5 million due to a weaker industrywide demand for security solutions, compounded by order and project delays stemming from uncertainty surrounding the most recent election cycle. Vicon has now renewed its momentum with new orders as the market refocuses and achieved record sales in January 2025. Many of these orders began shipping in the second fiscal quarter of 2025, including a record-breaking $10.4 million order for a state government corrections facility in the mid-Atlantic region. We expect sales for the fiscal second quarter to put us on well on pace to reach or exceed our year-over-year growth target of 15%-20%.
"Our optimistic outlook for Vicon is based on the exciting new security technologies, products and partnerships announced in recent months. Vicon introduced NEXT, a next generation modular camera platform that transforms how security integrators and end-users install, interact, and support their camera systems, which began shipping in February 2025. We have also integrated disruptive AI analytics for detecting armed persons in surveillance footage to be included in NEXT Cameras. With Hailo, an AI chip manufacturer known for its high-performance edge AI processors, we have integrated the groundbreaking Hailo-15 System-on-a-Chip (SoC) into the NEXT Modular Camera System. Taken together, we believe Vicon is well-positioned to leverage these investments in new technologies and products to ramp sales, with an increasing opportunity to grow revenue and gross margin over the next several quarters.
"For our Industrial services segment, AIS continued to execute on orders and contract awards, growing 7% to $8.3 million in the first quarter of 2025. From large-scale infrastructure to wastewater infrastructure contracts, AIS's success is powering its strong market position and expanding its growth outlook. AIS has multiple projects set for completion in 2025, and a strong pipeline of orders from leading companies. We also continue to explore additional acquisition opportunities that can build on and accelerate our growth further.
"Looking ahead, we believe the strength and reputation of our two segments' products and services will continue to build revenue and shareholder value in 2025. Vicon's next generation cameras and software are leveraging new AI capabilities and technologies to attract attention from new and existing customers to meet their evolving security challenges. AIS is demonstrating its ability to attract multi-million-dollar project wins from leading companies and governmental agencies, with a strong pipeline that will drive additional revenue," concluded Govil.
Segment Highlights:
Vicon Industries:
- Vicon Industries revenues for fiscal Q1'25 decreased 41% to $5.5 million.
- Announced a record breaking $10.4 million order for a state government corrections facility in the mid-Atlantic region, expanding the customer's Valerus surveillance security system with additional hardware, including enhanced storage infrastructure.
- Unveiled NEXT, a next generation modular camera platform that transforms how security integrators and end-users install, interact, and support their camera systems, which began shipping in January 2025.
- Secured a partnership with Hailo, an AI chip manufacturer known for its high-performance edge AI processors, to integrate the groundbreaking Hailo-15 System-on-a-Chip (SoC) into Vicon's NEXT Modular Camera System.
- Announced the integration of an innovative Artificial Intelligence (AI) gun detection feature in its NEXT Cameras, marking a significant milestone in public safety and security technology.
Advanced Industrial Services:
- Industrial Services segment revenues for fiscal Q1'25 increased 7% to $8.3 million.
- Awarded two project contracts totaling $6.7 million for upgrades at the Clearwater Road Wastewater Treatment Facility in Derry Township, Pennsylvania.
First Quarter Fiscal 2025 Financial Results Overview
Revenues for the first fiscal quarter of 2025 were $13.7 million, compared to $16.9 million in the first fiscal quarter of 2024, a decrease of 19%. The decrease in revenue for the year was due to increased demand for the Company's AIS products and services, offset by a decrease in security technology products under our Vicon brand.
The Security segment revenues for the quarter ended December 31, 2024, and 2023 were $5.5 million and $9.2 million, respectively, a decrease of 41%, due to decreased demand for security technology products under the Vicon brand. Industrial Services segment revenues for the first quarter of 2025 increased by 7% to $8.3 million, up from $7.7 million in the first quarter of 2024, primarily due to the increase in demand for its products and services.
Gross Profit for the three months ended December 31, 2024, was $5.7 million, or 41% of revenues, as compared to gross profit of $7.1 million, or 42% of revenues, for the three months ended December 31, 2023.
Total operating expenses for the first fiscal quarter of 2025 were $8.0 million compared to $7.8 million in the first fiscal quarter of 2024. The increase in total operating expenses was primarily driven by increases in salaries and wages, general and administrative expenses, and research and development expenses related to the Security Segment's development of proprietary technology and next generation solutions associated with security and surveillance systems software.
Operating loss for the first fiscal quarter of 2025 was $2.3 million as compared to an operating loss of $0.7 million for the first fiscal quarter of 2024. The operating loss was primarily due to the decrease in revenue and resulting lower gross profit.
Net loss in the first fiscal quarter of 2025 totaled $28.9 million compared to a net loss of $1.3 million in the first fiscal quarter of 2025. The increase in net loss was primarily due to recognized losses on excess fair value of warrants of $25.8 million, which represents the difference between the fair value of the shares issued and the value of the warrants exercised, following a recently completed reverse stock split.
Cash, cash equivalents and restricted cash as of December 31, 2024, was $5.5 million, compared to $5.4 million as of September 30, 2024.
Inventories increased to $11.1 million at December 31, 2024, from $7.0 million at September 30, 2024.
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.
Investor Relations
Chris Tyson
Executive Vice President - MZ North America
Direct: 949-491-8235
CETX@mzgroup.us
www.mzgroup.us
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| (Unaudited) | ||||||||
| December 31, | September 30, | |||||||
| 2024 | 2024 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 4,224,130 | $ | 3,897,511 | ||||
| Restricted cash | 1,240,124 | 1,522,881 | ||||||
| Trade receivables, net | 9,202,802 | 11,159,676 | ||||||
| Trade receivables, net - related party | 524,838 | 685,788 | ||||||
| Inventory, net | 11,115,435 | 6,988,529 | ||||||
| Contract assets, net | 1,541,239 | 985,207 | ||||||
| Prepaid expenses and other current assets | 1,195,128 | 1,456,687 | ||||||
| Total current assets | 29,043,696 | 26,696,279 | ||||||
| Property and equipment, net | 9,695,289 | 9,133,578 | ||||||
| Right-of-use operating lease assets | 1,837,769 | 1,933,378 | ||||||
| Royalties receivable, net - related party | 274,756 | 456,611 | ||||||
| Goodwill | 3,708,347 | 3,708,347 | ||||||
| Other | 2,129,566 | 2,187,265 | ||||||
| Total Assets | $ | 46,689,423 | $ | 44,115,458 | ||||
| Liabilities & Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,469,117 | $ | 4,520,173 | ||||
| Sales tax payable | 9,515 | 73,024 | ||||||
| Revolving line of credit | 4,096,898 | 3,125,011 | ||||||
| Current maturities of long-term liabilities | 6,745,423 | 4,732,377 | ||||||
| Operating lease liabilities - short-term | 845,535 | 832,823 | ||||||
| Deposits from customers | 320,130 | 408,415 | ||||||
| Accrued expenses | 1,628,618 | 1,393,902 | ||||||
| Accrued payable on inventory in transit | 5,149,660 | 640,450 | ||||||
| Contract liabilities | 1,279,185 | 1,254,204 | ||||||
| Deferred revenue | 1,206,052 | 1,297,616 | ||||||
| Accrued income taxes | 163,170 | 314,827 | ||||||
| Total current liabilities | 24,913,303 | 18,592,822 | ||||||
| Long-term liabilities | ||||||||
| Long-term debt | 11,893,371 | 13,270,178 | ||||||
| Long-term operating lease liabilities | 1,049,307 | 1,159,204 | ||||||
| Other long-term liabilities | 307,468 | 274,957 | ||||||
| Deferred Revenue - long-term | 560,653 | 658,019 | ||||||
| Warrant liabilities | 9,454,842 | 5,199,436 | ||||||
| Total long-term liabilities | 23,265,641 | 20,561,794 | ||||||
| Total liabilities | 48,178,944 | 39,154,616 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders' equity | ||||||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, | ||||||||
| Series 1, 3,000,000 shares authorized, 2,579,994 shares issued and | ||||||||
| 2,515,894 shares outstanding as of December 31, 2024 and 2,456,827 shares issued and | ||||||||
| 2,392,727 shares outstanding as of September 30, 2024 (liquidation value of $10 per share) | 2,580 | 2,457 | ||||||
| Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at | ||||||||
| December 31, 2024 and September 30, 2024 | 50 | 50 | ||||||
| Common stock, $0.001 par value, 70,000,000 shares authorized, | ||||||||
| 1,784,575 shares issued and outstanding at December 31, 2024 and | ||||||||
| 14,176 shares issued and outstanding at September 30, 2024 | 1,785 | 14 | ||||||
| Additional paid-in capital | 95,876,237 | 73,262,536 | ||||||
| Accumulated deficit | (100,109,753 | ) | (71,355,386 | ) | ||||
| Treasury stock, 64,100 shares of Series 1 Preferred Stock at December 31, 2024, | ||||||||
| and September 30, 2024 | (148,291 | ) | (148,291 | ) | ||||
| Accumulated other comprehensive income | 2,817,858 | 2,949,297 | ||||||
| Total Cemtrex stockholders' equity | (1,559,534 | ) | 4,710,677 | |||||
| Non-controlling interest | 70,013 | 250,165 | ||||||
| Total liabilities and stockholders' equity | $ | 46,689,423 | $ | 44,115,458 | ||||
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
| For the three months ended | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Revenues | 13,739,899 | 16,878,166 | ||||||
| Cost of revenues | 8,037,963 | 9,795,767 | ||||||
| Gross profit | 5,701,936 | 7,082,399 | ||||||
| Operating expenses | ||||||||
| General and administrative | 7,093,289 | 6,971,966 | ||||||
| Research and development | 890,083 | 848,805 | ||||||
| Total operating expenses | 7,983,372 | 7,820,771 | ||||||
| Operating loss | (2,281,436 | ) | (738,372 | ) | ||||
| Other (expense)/income | ||||||||
| Other income, net | 34,973 | 78,411 | ||||||
| Interest expense | (483,913 | ) | (583,683 | ) | ||||
| Loss on exercise of warrant liabilities | (15,796,105 | ) | - | |||||
| Changes in fair value of warrant liability | (10,020,212 | ) | - | |||||
| Total other expense, net | (26,265,257 | ) | (505,272 | ) | ||||
| Net loss before income taxes | (28,546,693 | ) | (1,243,644 | ) | ||||
| Income tax expense | (120,538 | ) | (70,751 | ) | ||||
| Loss from Continuing operations | (28,667,231 | ) | (1,314,395 | ) | ||||
| (Loss)/income from discontinued operations, net of tax | (267,288 | ) | 10,492 | |||||
| Net loss | (28,934,519 | ) | (1,303,903 | ) | ||||
| Less net loss in noncontrolling interest | (180,152 | ) | (96,409 | ) | ||||
| Net loss attributable to Cemtrex, Inc. stockholders | $ | (28,754,367 | ) | $ | (1,207,494 | ) | ||
| (Loss)/income per share - Basic & Diluted | ||||||||
| Continuing Operations | $ | (16.15 | ) | $ | (2,440.85 | ) | ||
| Discontinued Operations | $ | (0.15 | ) | $ | 21.03 | |||
| Weighted Average Number of Shares-Basic & Diluted | 1,764,341 | 499 | ||||||
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | (28,934,519 | ) | $ | (1,303,903 | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities | ||||||||
| Depreciation and amortization | 337,259 | 368,301 | ||||||
| Loss on disposal of property and equipment | 18,846 | - | ||||||
| Noncash lease expense | 254,695 | 193,281 | ||||||
| Bad debt (recovery)/expense | (7,367 | ) | 11,964 | |||||
| Contract modification - related party | 280,545 | - | ||||||
| Share-based compensation | 4,087 | 7,557 | ||||||
| Shares issued to pay for services | - | 40,000 | ||||||
| Accrued interest on notes payable | 262,107 | 327,132 | ||||||
| Non-cash royalty income | (13,797 | ) | (13,282 | ) | ||||
| Amortization of original issue discounts on notes payable | 4,167 | - | ||||||
| Loan origination costs | 5,000 | 18,133 | ||||||
| Loss on exercise of warrant liabilities | 15,796,105 | - | ||||||
| Changes in fair value of warrant liability | 10,020,212 | - | ||||||
| Changes in operating assets and liabilities net of effects from acquisition | ||||||||
| of subsidiaries: | ||||||||
| Trade receivables | 1,964,241 | (696,824 | ) | |||||
| Trade receivables - related party | 66,057 | (163,349 | ) | |||||
| Inventory | (4,126,906 | ) | 800,602 | |||||
| Contract assets | (556,032 | ) | 45,066 | |||||
| Prepaid expenses and other current assets | 261,559 | 636,906 | ||||||
| Other assets | 157,699 | (54,592 | ) | |||||
| Accounts payable | (1,051,056 | ) | (2,072,392 | ) | ||||
| Accounts payable - related party | - | 221 | ||||||
| Sales tax payable | (63,509 | ) | (25,116 | ) | ||||
| Operating lease liabilities | (256,271 | ) | (193,130 | ) | ||||
| Deposits from customers | (88,285 | ) | 26,179 | |||||
| Accrued expenses | 4,743,926 | (941,698 | ) | |||||
| Contract liabilities | 24,981 | 8,406 | ||||||
| Deferred revenue | (188,930 | ) | (54,982 | ) | ||||
| Income taxes payable | (149,142 | ) | (7,823 | ) | ||||
| Other liabilities | 32,511 | (95,730 | ) | |||||
| Net cash used by operating activities | (1,201,817 | ) | (3,139,073 | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of property and equipment | (924,428 | ) | (290,666 | ) | ||||
| Proceeds from sale of property and equipment | 5,529 | - | ||||||
| Royalties on related party revenues | 10,000 | - | ||||||
| Proceeds from sale of marketable securities | - | 356 | ||||||
| Investment in MasterpieceVR | (100,000 | ) | (100,000 | ) | ||||
| Net cash used by investing activities | (1,008,899 | ) | (390,310 | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds on revolving line of credit | 7,025,841 | 11,655,935 | ||||||
| Payments on revolving line of credit | (6,053,954 | ) | (8,371,144 | ) | ||||
| Payments on debt | (124,912 | ) | (2,304,903 | ) | ||||
| Payments on Paycheck Protection Program Loans | (10,123 | ) | (10,120 | ) | ||||
| Proceeds on bank loans | - | 28,331 | ||||||
| Proceeds from notes payable | 500,000 | - | ||||||
| Proceeds from warrant exercises | 1,050,597 | - | ||||||
| Net cash provided by financing activities | 2,387,449 | 998,099 | ||||||
| Effect of currency translation | (132,871 | ) | 198,454 | |||||
| Net decrease in cash, cash equivalents, and restricted cash | 176,733 | (2,531,284 | ) | |||||
| Cash, cash equivalents, and restricted cash at beginning of period | 5,420,392 | 6,349,562 | ||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 5,464,254 | $ | 4,016,732 | ||||
| Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash | ||||||||
| Cash and cash equivalents | $ | 4,224,130 | $ | 2,835,216 | ||||
| Restricted cash | 1,240,124 | 1,181,516 | ||||||
| Total cash, cash equivalents, and restricted cash | $ | 5,464,254 | $ | 4,016,732 | ||||
Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Cash paid during the period for interest | $ | 217,639 | $ | 238,418 | ||||
| Cash paid during the period for income taxes, net of refunds | $ | 269,680 | $ | 176,378 | ||||
| Supplemental Schedule of Non-Cash Investing and Financing Activities | ||||||||
| Shares issued to pay for services | $ | - | $ | 40,000 | ||||
| Financing of fixed asset purchase | $ | - | $ | 28,331 | ||||
| Series A Warrant Exercises | $ | 21,515,777 | $ | - | ||||
| Noncash recognition of new leases | $ | 159,086 | $ | - |
