Cemtrex Reports Financial Results for the 2017 Fiscal Third Quarter

Total Revenue Increased 13% Year-Over-Year to $27.8 Million, Book Value Increased 108% to $3.49 per share from year ago

Farmingdale, New York, UNITED STATES


Farmingdale, NY, Aug. 14, 2017 (GLOBE NEWSWIRE) -- Cemtrex (Nasdaq: CETX, CETXP, CETXW), a world leading industrial and manufacturing leader, today reported its financial results for the three-month and nine-month periods ended June 30, 2017.

“We maintained strong topline growth in the third quarter of fiscal 2017, with total revenue increasing 13% to $27.8 million, while remaining profitable. Our ability to drive steady revenue growth is evident when looking out over the past couple of years. Our revenue has increased from $42 million to $56 million to $86 million for the nine month periods ended June 30, 2015, 2016 and 2017, respectively,” stated Saagar Govil, Chairman and CEO of Cemtrex. “We are focused on continuing to grow our business through the acquisition of new, high quality customers, as well as expanding organically through our existing customers. In April 2017, we received a record number of new incoming orders for a single month, totaling over $21 million. Included in these orders is a $15 million, three year agreement with one of our existing customers, which is the single largest order we have ever received.”

“In addition, we announced the establishment of our new subsidiary, Cemtrex Advanced Technologies along with its first development product, an advanced ‘smart desk.’ It is an exciting time at Cemtrex as we leverage our deep experience in electronics development and manufacturing and focus on bringing to market proprietary technologies that we believe are revolutionary. Our initial products, in line with the innovative ‘smart desk’, will embrace the concept of bringing the workspace environment up to speed with technological advances.”

“Cemtrex is strategically positioned to continue growth organically and through acquisitions. With $13.2 million in cash and cash equivalents we are consistently evaluating growth opportunities to advance our businesses. This is a pivotal time for the company as we see a strong pipeline in new and existing customers as well as new product development under our subsidiary. We continue to scale the business with shareholder value as a core focus on going,” concluded Mr. Govil.

Fiscal 2017 Third Quarter Business Highlights and Financial Highlights

  • Total Revenue for Q3 2017 increased 13% to $27.8 million, compared to $24.7 million for Q3 2016. This increase was primarily due to the acquisition of Periscope on May 31, 2016.
    • Industrial Products & Services (IPS) Revenue for Q3 2017 increased 8% to $13.5 million, compared to $12.5 million for Q3 2016. The increase was primarily due to increased shipment of goods and execution of projects.
    • Electronics Manufacturing Services (EMS) Revenue for Q3 2017 increased by 17% to $14.3 million, compared to $12.2 million for Q3 2016. This increase was primarily due to the acquisition of Periscope, an electronics manufacturing solutions business. 

  • Gross Margin for Q3 2017 was 36%, compared to 33% for Q3 2016. 

  • Operating Margin for Q3 2017 decreased to 5.1% compared to 6.9% for Q3 2016. This is attributable to an increase in operating expenses of 31% to $8.5 million, compared to $6.5 million for Q3 2016, which includes an increase of sales, marketing and professional service costs for the 2017 period. 

  • Net Income for Q3 2017 was $1.2 million or $0.11 per share, compared to $1.4 million, or $0.16 per share for Q3 2016. This decrease was due to increase sales and marketing expenses in the third quarter, and loss on disposal of assets.

Nine Month 2017 Financial Highlights 

  • Total Revenue for the nine months ended June 30, 2017 increased 54% to $87.7 million, compared to $56.9 million for the same period in 2017. This increase was primarily due to the acquisitions of Advanced Industrial Services (AIS) and Periscope.
    • IPS Revenue for the nine months ended June 30, 2017 increased 27% to $42.0 million, compared to $33.2 million for the same period in 2016. The increase was primarily due to increased shipment of goods and execution of projects.
    • EMS Revenue for the nine months ended June 30, 2017 increased 93% to $45.7 million, compared to $23.7 for the same period in 2016. The primary reason for increased sales was due to the acquisition of Periscope. 

  • Gross Margin for the nine months ended June 30, 2017 was 33%, compared to 31% for the same period in 2016. 

  • Operating Margin for the nine months ended June 30, 2017 decreased to 4.3% from 5.4% in the same period of 2016. This increase was primarily due to an increase of sales, marketing and professional service costs for the 2017 period. Operating expenses increased 68% to $24.8 million, compared to $14.8 million for the same period in 2016 due to the increase from the acquisitions of AIS and Periscope. 

  • Net Income for the nine months ended June 30, 2017 increased 2% to $3.0 million, or $0.26 per share, compared to $2.9 million, or $0.36 per share for the same period in 2016. This increase was primarily due to the acquisitions of AIS and Periscope. 

Balance Sheet as of June 30, 2017:

  • Cash and Cash equivalents were $13.2 million or $1.28 per share.
  • Book value was $3.49 per share.

Conference Call and Webcast Information

Cemtrex will host a conference call with the investment community on Thursday, August 14th at 11:00 a.m. Eastern Time featuring remarks by Saagar Govil, Chairman and CEO of Cemtrex. The dial-in numbers for the conference call are 877-524-8416 (Toll-Free) or 412-902-1028 (Toll). Please call at least five minutes before the scheduled start time. 

For interested individuals unable to join the conference call, a replay of the call will be available through August 28, 2017, at 877-660-6853 (Toll-Free) or 201-612-7415 (Toll). Participants must use the following code to access the replay of the call: 13667842.

Cemtrex will also offer a live and archived webcast of the conference call, accessible from the “Investor Relations” section of the Company’s website at http://www.cemtrex.com/investor-relations/.  The online archive of the webcast will be available for 30 days following the call.

About Cemtrex

Cemtrex Inc. (CETX) is a global, diversified industrial and manufacturing company that provides a wide array of solutions to meet today’s technology challenges and is rapidly growing through acquisitions. Cemtrex provides: manufacturing services of advanced custom engineered electronics, industrial contracting services, monitoring instruments for industrial processes and environmental compliance, and equipment for controlling particulates, hazardous pollutants and greenhouse gases used in carbon trading globally. 
@Cemtrex

Safe Harbor Statement 

This press release contains forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. This release may contain non-GAAP financial information and are not calculated or presented in accordance with US GAAP. The Company believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. The Company’s management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate the Company’s business and to make operating decisions.


  For the three months ended  For the nine months ended 
  June 30, June 30, 
  2017  2016  2017  2016 
Revenues                
Industrial Products & Services Revenue $13,467,483  $12,468,737  $42,024,611  $33,206,953 
Electronics Manufacturing Services Revenue  14,339,173   12,246,116   45,684,285   23,730,693 
Total revenues  27,806,656   24,714,853   87,708,896   56,937,646 
                 
Cost of revenues                
Cost of Sales, Industrial Products & Services  9,437,556   8,935,388   30,327,245   24,298,643 
Cost of Sales, Electronics Manufacturing Services  8,437,194   7,620,796   28,393,397   14,774,708 
Total cost of revenues  17,874,750   16,556,184   58,720,642   39,073,351 
Gross profit  9,931,906   8,158,669   28,988,254   17,864,295 
                 
Operating expenses                
General and administrative  8,526,625   6,461,447   24,833,985   14,805,001 
Total operating expenses  8,526,625   6,461,447   24,833,985   14,805,001 
Operating income  1,405,281   1,697,222   4,154,269   3,059,294 
                 
Other income (expense)                
Other Income (expense)  154,579   94,781   (81,969)  559,287 
Interest Expense  (204,992)  (237,665)  (948,360)  (597,826)
Total other income (expense)  (50,413  (142,884)  (1,030,329)  (38,539)
                 
Net income before income taxes  1,354,868   1,554,338   3,123,940   3,020,755 
                 
Provision for income taxes  172,286   123,298   122,197   67,424 
Net income  1,182,582   1,431,040   3,001,743   2,953,331 
                 
Preferred dividends paid  -   -   332,938   - 
Net income available to common shareholders  1,182,582   1,431,040   2,668,805   2,953,331 
                 
Other comprehensive income/(loss)                
Foreign currency translation gain/(loss)  891,215   38,392   573,389   (375,709)
Comprehensive income available to common shareholders $2,073,797  $1,469,432  $3,242,194  $2,577,622 
                 
Income Per Common Share-Basic $0.12  $0.16  $0.27  $0.36 
Income Per Common Share-Diluted $0.11  $0.16  $0.26  $0.36 
                 
Weighted Average Number of Common Shares-Basic  10,033,060   8,804,446   9,932,894   8,116,266 
Weighted Average Number of Common Shares-Diluted  10,300,022   8,872,966   10,214,020   8,184,552 

  June 30, 2017  September 30, 2016 
Assets      
Current assets        
Cash and equivalents $13,241,368  $6,045,521 
Restricted Cash  811,569   698,459 
Accounts receivable, net  14,576,581   13,568,727 
Inventory, net  16,565,678   14,071,627 
Prepaid expenses and other current assets  2,102,444   2,475,404 
Deferred tax asset  67,000   67,000 
Total current assets  47,364,640   36,926,738 
         
Property and equipment, net  16,860,577   17,647,888 
Goodwill  918,819   918,819 
Other assets  85,203   540,064 
Total Assets $65,229,239  $56,033,509 
         
Liabilities & Stockholders’ Equity (Deficit)        
Current liabilities        
Accounts payable $8,026,375  $7,733,459 
Credit card payable  218,204   294,169 
Sales tax payable  247,531   263,107 
Revolving line of credit  2,823,047   3,454,913 
Accrued expenses  3,010,121   5,174,529 
Deferred revenue  564,901   1,387,139 
Accrued income taxes  1,139,220   1,042,589 
Convertible notes payable  520,000   3,748,000 
Current portion of long-term liabilities  2,015,434   2,056,887 
Total current liabilities  18,564,833   25,154,792 
         
Long-term liabilities        
Loans payable to bank  5,486,709   6,402,228 
Notes payable  397,468   1,222,158 
Mortgage payable  3,785,016   3,869,066 
Notes payable to related party  -   3,599,307 
Total long-term liabilities  9,669,193   15,092,759 
Deferred tax liabilities  94,000   94,000 
Total liabilities  28,328,026   40,341,551 
         
Commitments and contingencies  -   - 
         
Shareholders’ equity        
Preferred stock , $0.001 par value, 10,000,000 shares authorized, Series A,
1,000,000 shares authorized, issued and outstanding at June 30, 2017 and
September 30, 2017
  1,000   1,000 
Series 1, 3,000,000 shares authorized, 1,736,858 and no shares issued and
outstanding as of June 30, 2017 and September 30, 2016, respectively
  1,736   - 
Common stock, $0.001 par value, 20,000,000 shares authorized,
10,207,739 shares issued and outstanding at June 30, 2017 and
9,460,283 shares issued and outstanding at September 30, 2016
  10,207   9,460 
Additional paid-in capital  23,350,562   5,230,745 
Retained earnings  13,938,466   11,424,900 
Accumulated other comprehensive loss  (400,758)  (974,147)
Total shareholders’ equity  36,901,213   15,691,958 
Total liabilities and shareholders’ equity $65,229,239  $56,033,509 



                    

        

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