Cemtrex Reports Second Quarter 2021 Financial Results

Brooklyn, NY, June 24, 2021 (GLOBE NEWSWIRE) — – Cemtrex Inc. (NASDAQ: CETX, CETXP, CETXW), 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, 2021.

Second Quarter 2021 Financial Results

Revenue for the three months ended March 31, 2021, and 2020 was $9.3 million and $12.1 million, respectively, a decrease of 24%. Revenue for the six months ended March 31, 2021, and 2020 was $18.1 million and $24.3, respectively, a decrease of 26%. The decrease in revenue was primarily due to shutdowns and limited operations of businesses due to the COVID-19 crisis. The Advanced Technologies segment revenues for the three months ended March 31, 2021, decreased by 11% to $5.5 million, and the Industrial Services segment revenues for quarter decreased by 36%, to $3.8 million.

Gross Profit for the second quarter of 2021 was $3.9 million, or 42% of revenues as compared to gross profit of $5.3 million, or 44% of revenues for the year ago period. Gross profit decreased due to lower sales and varies from product to product and from customer to customer.

Total operating expenses for three months ended March 31, 2021 were $5.9 million, compared to $5.9 million in the prior year’s quarter.

Operating activities for continuing operations used $2.9 million for the quarter ended March 31, 2021 compared to using $1.4 million of cash for the quarter ended March 31, 2020.

Net income for the quarter ended March 31, 2021 was $2.5 million, as compared to a net loss of $1.6 million in 2020. Net income increased in the second quarter as compared to the same period last year primarily due to other income items including a one-time settlement agreement and unrealized gains on marketable securities.

Cash and cash equivalents totaled $15.6 million at March 31, 2021, as compared to $15.9 million at December 31, 2020 and $19.5 million at September 30, 2020.

Management Commentary

Cemtrex’s Chairman and CEO, Saagar Govil, commented on the results: “In the second quarter of 2021 we continued to see a weakness due to COVID-19 which affected our overall business. Looking ahead we continue to focus on driving top line growth as markets return to normal and spending returns. We continue to further develop our product lines, with ongoing R&D in our Advanced Technologies Segment’s proprietary technology, including Virtual Reality solutions, SmartDesk, and Artificial Intelligence (AI) based, next generation solutions associated with security and surveillance systems software. We believe with ongoing investments in our core technologies and a rebounding economy, we continue to be well positioned for a return to growth that will create long term value for our shareholders,” concluded Govil.

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 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
[email protected]
www.mzgroup.us

Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheets – USD ($) Mar. 31, 2021 Sep. 30, 2020
Current assets    
Cash and equivalents $ 15,573,734   $ 19,490,061  
Restricted cash   1,706,926     1,582,798  
Short-term investments   522,612     887,746  
Trade receivables, net   5,403,292     6,686,797  
Trade receivables – related party   1,498,776     1,432,209  
Inventory -net of allowance for inventory obsolescence   7,358,808     6,793,806  
Prepaid expenses and other assets   1,820,031     1,188,317  
Total current assets   33,884,179     38,061,734  
Property and equipment, net   7,335,201     6,961,751  
Right-of-use assets   2,862,154     2,728,380  
Assets held for sale   8,323,321     8,323,321  
Goodwill   5,886,096     4,370,894  
Other   1,074,861     744,207  
Total Assets   59,365,812     61,190,287  
Current liabilities    
Accounts payable   2,314,545     2,857,817  
Short-term liabilities   6,595,935     7,034,510  
Lease liabilities – short-term   764,108     721,036  
Deposits from customers   96,468     29,660  
Accrued expenses   2,676,724     2,392,487  
Deferred revenue   1,473,041     1,651,784  
Accrued income taxes   553     89,318  
Total current liabilities   13,921,374     14,776,612  
Long-term liabilities    
Loans payable to bank   1,323,989     1,871,201  
Long-term lease liabilities   2,106,545     2,027,406  
Notes payable   3,154,743     6,029,999  
Mortgage payable   2,306,834     2,355,542  
Other long-term liabilities   1,075,171     1,063,733  
Paycheck Protection Program Loans   5,406,477     2,169,437  
Deferred Revenue – long-term   784,667     467,329  
Total long-term liabilities   16,158,426     15,984,647  
Total liabilities   30,079,800     30,761,259  
Commitments and contingencies    
Shareholders’ equity    
Preferred stock value   1,795     2,157  
Common stock, $0.001 par value, 50,000,000 shares authorized, 18,711,463 shares issued and outstanding at March 31, 2021 and 17,622,539 shares issued and outstanding at September 30, 2020   18,711     17,623  
Additional paid-in capital   58,320,570     60,221,766  
Retained earnings (accumulated deficit)   (31,758,563 )   (32,520,084 )
Treasury stock at cost   (148,291 )   (148,291 )
Accumulated other comprehensive income (loss)   1,824,350     1,777,112  
Total Cemtrex stockholders’ equity   28,258,622     29,351,383  
Non-controlling interest   1,027,390     1,077,645  
Total liabilities and shareholders’ equity   59,365,812     61,190,287  
Series A and C Preferred Stock [Member]    
Shareholders’ equity    
Preferred stock value $ 50   $ 100  

Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)

Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) – USD ($) 3 Months Ended 6 Months Ended
Mar. 31, 2021 Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2020
Income Statement [Abstract]        
Revenues $ 9,260,385   $ 12,113,847   $ 18,096,461   $ 24,333,930  
Cost of revenues   5,331,501     6,767,743     10,162,107     13,639,340  
Gross profit   3,928,884     5,346,104     7,934,354     10,694,590  
Operating expenses        
General and administrative   5,249,985     5,458,071     10,667,181     10,032,481  
Research and development   641,497     404,933     1,275,722     781,519  
Total operating expenses   5,891,482     5,863,004     11,942,903     10,814,000  
Operating income/(loss)   (1,962,598 )   (516,900 )   (4,008,549 )   (119,410 )
Other income/(expense)        
Other income/(expense)   1,679,944     447,792     2,630,932     672,117  
Settlement Agreement – Related Party   3,674,165       3,674,165    
Interest Expense   (849,076 )   (1,348,298 )   (1,458,017 )   (1,830,820 )
Total other income/(expense), net   4,505,033     (900,506 )   4,847,080     (1,158,703 )
Net loss before income taxes   2,542,435     (1,417,406 )   838,531     (1,278,113 )
Income tax benefit/(expense)   (98,477 )   (189,543 )   (127,431 )   (189,543 )
Net income/(loss)   2,443,958     (1,606,949 )   711,100     (1,467,656 )
Less income in noncontrolling interest   (10,174 )   (7,848 )   (50,421 )   187,063  
Net income/(loss) attributable to Cemtrex, Inc. shareholders   2,454,132     (1,599,101 )   761,521     (1,654,719 )
Net income/(loss)   2,443,958     (1,606,949 )   711,100     (1,467,656 )
Other comprehensive income/(loss)        
Foreign currency translation gain/(loss)   (87,972 )   (749,826 )   (40,491 )   (166,800 )
Defined benefit plan actuarial gain/(loss)   87,895       87,895    
Comprehensive income/(loss)   2,443,881     (2,356,775 )   758,504     (1,634,456 )
Less comprehensive income/(loss) attributable to noncontrolling interest   19,625     (897 )   50,255     (214,237 )
Comprehensive income/(loss) attributable to Cemtrex, Inc. shareholders $ 2,424,256   $ (2,355,878 ) $ 708,249   $ (1,420,219 )
Income/(loss) Per Share-Basic $ 0.13   $ (0.26 ) $ 0.04   $ (0.31 )
Income/(loss) Per Share-Diluted $ 0.13   $ (0.26 ) $ 0.04   $ (0.31 )
Weighted Average Number of Shares-Basic   18,559,113     6,250,761     18,195,731     5,292,167  
Weighted Average Number of Shares-Diluted   18,629,064     6,250,761     18,200,974     5,292,167  

Condensed Consolidated Statements of Cash Flows
(Unaudited/Restated)

Condensed Consolidated Statements of Cash Flows (Unaudited) – USD ($) 6 Months Ended
Mar. 31, 2021 Mar. 31, 2020
Cash Flows from Operating Activities    
Net income/(loss) $ 711,100   $ (1,467,656 )
Adjustments to reconcile net loss to net cash provided/(used) by operating activities:    
Depreciation and amortization   680,004     888,391  
Gain on disposal of property and equipment   9,219     311  
Amortization of right-of-use assets   438,539     281,758  
Change in allowance for inventory obsolescence   (948,733 )   (19,569 )
Change in allowance for doubtful accounts   (137,356 )   (6,416 )
Share-based compansation   65,318     143,208  
Income tax expense/ (benefit)   127,431     189,543  
Interest expense paid in equity shares   657,329     1,004,518  
Accrued interest on notes payable   41,833     291,384  
Amortization of original issue discounts on notes payable   475,000     317,667  
Gain on marketable securities   (1,869,338 )   (338,057 )
Settlement Agreement – Related Party   (3,674,165 )  
Changes in operating assets and liabilities net of effects from acquisition of subsidiaries:    
Accounts receivable   1,420,861     (62,013 )
Accounts receivable – related party   (71,581 )   (90 )
Inventory   383,731     (419,711 )
Prepaid expenses and other curent asstets   (631,714 )   (297,176 )
Other assets   169,346     (834,561 )
Other liabilities   11,438     (90,121 )
Accounts payable   (543,272 )   (854,616 )
Operating lease liabilities   (450,102 )   (293,138 )
Deposits from customers   66,808     9,166  
Accrued expenses   161,820     (143,160 )
Deferred revenue   138,595     227,172  
Income taxes payable   (88,765 )   102,463  
Net cash used by operating activities   (2,856,654 )   (1,370,703 )
Cash Flows from Investing Activities    
Purchase of property and equipment   (944,601 )   (4,340,023 )
Investment in Virtual Driver Interactive   (900,000 )  
Investment in MasterpieceVR   (500,000 )  
Proceeds from sale of marketable securities   7,080,375     13,083,547  
Purchase of marketable securities   (4,845,903 )   (12,347,199 )
Purchases of treasury stock     (190,483 )
Note Receivable – Related party    
Net cash used by investing activities   (110,129 )   (3,794,158 )
Cash Flows from Financing Activities    
Proceeds from notes payable     2,990,000  
Payments on notes payable   (2,070,257 )   (676,640 )
Proceeds on bank loans     2,476,000  
Payments on bank loans   (655,276 )   (133,414 )
Proceeds from Paycheck Protection Program Loans   1,970,785    
Proceeds from securities purchase agreements     1,580,100  
Expenses on securities purchase agreements     (58,950 )
Revolving line of credit     387,598  
Net cash provided/(used) by financing activities   (754,748 )   6,564,694  
Effect of currency translation   (70,668 )   (193,974 )
Net increase in cash, cash equivalents, and restricted cash   (3,721,531 )   1,399,833  
Cash, cash equivalents, and restricted cash at beginning of period   21,072,859     2,858,085  
Cash, cash equivalents, and restricted cash at end of period   17,280,660     4,063,944  
Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash    
Cash and equivalents   15,573,734     2,809,591  
Restricted cash   1,706,926     1,254,353  
Total cash, cash equivalents, and restricted cash   17,280,660     4,063,944  
Supplemental Disclosure of Cash Flow Information:    
Cash paid during the period for interest   283,855     342,268  
Cash paid during the period for income taxes   88,765     188  
Supplemental Schedule of Non-Cash Investing and Financing Activities    
Investment in Virtual Driver Interactive   439,774    
Stock issued to pay for products and/or services     198,583  
Stock issued to pay notes payable $ 1,707,327   $ 3,632,518  

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *